Americas travel retail rebounds after Covid-19

05 April, 2023

The travel retail industry calendar moves on to the Americas and Summit of the Americas in Florida. Joe Bates reports on a region rebounding strongly after covid, but which does face challenges.

This month’s IAADFS Summit of the Americas show, which is due to take place at the Palm Beach County Convention Center in West Palm Beach, Florida, from 16-19 April, should be an upbeat affair. After years of pandemic-related misery, the Americas region has bounced back very strongly. Airport passenger volumes in Latin America and the Caribbean in 2022 reached 91% of pre-pandemic levels, for instance, according to Airports Council International (ACI).

Suppliers have reported some outstanding regional travel retail results for 2022. “Our business exploded in the duty free channel in 2022, especially in the Caribbean as more Americans are starting to resume leisure travel to the region,” reveals John McDonnell, managing director, international, at Tito’s Handmade Vodka. “In addition to the Caribbean and Puerto Rico, Tito’s is also performing well in Central America, particularly in markets like Panama and Costa Rica. Unlike Europe where we do have some pockets that are proving challenging, not so in the Americas. I’m pleased to say we’re doing well in almost every market in the Americas.”

Mauricio De Tuya, cluster director America for Spanish wine and spirits company Zamora Group, reports that the performance of its brands in the Americas travel retail market, which include Licor 43 liqueur and Martin Miller’s gin, was “astonishing” in 2022. “We were able to secure a large number of new listings in the cruise line business while we managed to open new locations for Licor 43 at very strategic US airports. In addition to this, the border business results have reached some historical levels.”

Such a quick uptick in the business has brought some challenges, however. One of the main issues for duty free retailers in the Americas has been keeping shelves restocked with wines and spirits at a time of soaring freight costs, rising domestic demand, a shortage of shipping containers, port congestion and a lack of truck drivers. Throw into the mix all the supply chain issues faced by suppliers and the shortages of older spirits in some categories such as Scotch single malt whisky and you have the perfect logistics storm.

Problem solving

Retailers, distributors and suppliers have worked tirelessly to try to alleviate the problems, introducing longer lead times, prioritising deliveries of fast-moving lines, switching to different bottle sizes, focusing on local, craft brands and introducing automated forecasting software systems. As we head into the second quarter of 2023, the availability of shipping containers is improving and freight prices have fallen, but they remain way above pre-pandemic levels.

Nearly 40 wine and spirits companies and distributors will be exhibiting at this month’s IAADFS show, including big groups such as Proximo Spirits, Pernod Ricard Travel Retail Americas, Diageo Global Travel, Brown-Forman and Beam Suntory. The event will also boast a two-day conference which will feature a keynote address from bestselling author Scott Miller, a senior advisor on thought leadership and strategy for Franklin Covey, a Salt Lake City-based corporate coaching firm.

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