The Vodka Report - Vodka in travel retail

08 July, 2015

Vodka is increasing its world coverage by taking the premium route in travel retail. Joe Bates looks at what’s on offer


Vodka is travelling down two very different paths in global travel retail at present. One smooth, well-signposted route is bathed in sunshine; the other road is rocky, bumpy and far less appealing. Standard-value vodka is heading in the latter direction – this sub-category flatlined in 2013, according to the most recent figures from the IWSR. 

In contrast, the super-premium tier – a space inhabited by the likes of Grey Goose, Cîroc, Belvedere and Ketel One, forged ahead, growing 30% over 2012. The performance of this sub-sector of the 3.7m-case travel retail vodka business helped it outperform the overall spirits category in 2013, growing 3.4% versus  just 1.4%. 

As Europe and North America continue to struggle economically, even leading premium brands such as Absolut (-10.4%) and Smirnoff (-0.4%) suffered in GTR in 2013. As a result, many of the leading vodka players are now looking to Asia, India and the Middle East, where many younger Millennial travellers in their 20s and 30s are increasingly willing to splash out on higher-priced vodkas. 

It’s no surprise then that Asia’s leading international hub, Singapore Changi, has become the top choice for vodka launches in travel retail. For instance, in March this year the latest travel retail exclusive Absolut flavour, Absolut Honey, I’m Coming Home was launched with much fanfare at the airport for a one-month period before a wider roll-out.

Travellers were able to sample five specially created cocktails during the Singapore launch: the hero serve Absolut Honey & Tea, Absolut Juicy Honey, Absolut Honey Kiss, Absolut Honey Chocolate and Absolut Honey Ru-bee. There was a digital element to the launch – passengers were able to take selfies in-store which were then converted into Honey, I’m Coming Home images, which could be shared on social media. 

It transpires Absolut is one of nine hero brands (and the only vodka) to get their own in-store boutique at DFS Group’s new two-story 11,400sq ft store at Changi’s Terminal 3, which opened in May this year. The new store, one of the largest in Asia Pacific, will host visits from master distillers, blenders and brand ambassadors throughout the year, and unveil worldwide product launches for the nine brands (the eight others being Dom Pérignon, Glenfiddich, Hendrick’s, Hennessy, Johnnie Walker, The Macallan, Martell and Penfolds). 

SPI Group is another company currently ramping up its focus on the Asian travel retail sector. Stoli has been growing steadily in travel retail since SPI took over its distribution in the channel in 2009. Sales in duty free increased 12% in 2013 and the brand is available in more than 250 airports (compared with only 100 six years ago). Now SPI has set its sights on carving out a bigger presence in the Chinese travel retail market. 

In May the company announced it had appointed Hong Kong-based company Raylook Trading as its dedicated exclusive duty free distributor for China, Hong Kong and Macau. Raylook is an experienced player in this region, having been the sole distributor of Louis Royer cognac for the same trio of duty free markets since 2002. 

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