Vodka under pressure in GTR

20 December, 2018

Premiumisation is the buzzword when it comes to attracting consumers in holiday mode. Clinton Cawood looks at how brands are working to appeal in this sector

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THERE WAS A TIME when vodka had the run of the place in global travel retail, at least when it came to white spirits. It might still top the charts in this channel, but things aren’t quite as easy nowadays.

In 2018, consumers are hungry for new spirit brands with craft credentials and provenance – and juniper included if possible. Producers are more than happy to oblige, meaning shelves and aisles are busier than ever, with launches and ever more creative activations. Which all means that it takes more effort than ever for vodka brands to make this channel work.

To look at the figures, vodka is holding its ground. The category overall made modest gains of 1.8% in travel retail between 2016 and 2017, according to the IWSR, which reports the category now accounts for just over 3.9m 9-litre cases.

According to Generation Research, vodka has kept its 6% market share steady within wines and spirits over the past five years, which also keeps it in the top spot ahead of other white spirits. Super-premium vodkas have made a strong contribution towards the category’s steady growth in recent years, the company says.

INFLUENCES

At Russian Standard, the strength of this higher-priced segment has influenced recent launches (see box). “The premiumisation trend continues to win ground – passengers are looking for better-quality products and they are ready to trade up and pay more for a vodka brand that meets their expectations,” says Irina Chirilescu, head of customer marketing at the brand’s owner Roust.

Tim Simmons, global head of travel retail for the IWSR, confirms this. “The vodka category generally is under pressure, but particularly in the ‘standard’ price bracket, as it is often commoditised,” he says. “However, super-premium vodka brands, particularly Grey Goose and those not needing flavour extensions to gain incremental volume sales, are performing quite well.”

Travel retail may be treating Grey Goose well, but that’s in no small part because the channel is valued by the team behind it at Bacardi. “Travel retail is a key brand-building channel and shop window for the business on a global scale,” says the company’s global marketing director for global travel retail, Julie Witherden.

She points out the brand’s summer campaign spanning airports in Europe, India and the US that set out to “encourage personal experience of the brand with photo opportunities and the chance to sample a Grey Goose Le Grand Fizz cocktail”.

This kind of activation obviously serves to not only drive sales, but also grow brand equity and awareness. There’s a lot more to travel retail than merely shifting bottles, as Simmons points out. “Brands are becoming more focused on having consumers see the brand in the airport shop but then wanting to tie in the travel retail activations with the domestic markets so they pick up the brand there too,” he says.





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