Vodka under pressure in GTR

20 December, 2018

This is a sentiment echoed by Beluga Vodka’s export director Pavel Ulyukaev. “Duty free is a window display for our international business. Its input into building brand awareness of Beluga globally is huge,” he says. “For us, the channel is a priority as it forms a base for consumers’ choice in duty-paid channels too.”

Ulyukaev notes that one of the big changes for vodka in travel retail in recent times is the emergence of craft vodka as a category. Simmons agrees, saying: “There’s undoubtedly a greater focus on ‘craft’ and sense of place across all the spirits categories and vodka is no exception.”

Related to this greater focus on craft is the growing importance of millennial consumers to travel retail in general, and it’s something that a number of vodka brands are making a priority. McCann at Pernod Ricard acknowledges that the growing number of millennials among those who travel makes this an important demographic for the company, but that this presents its own challenges, with targeted campaigns required.

“For instance, this audience favours brevity from brand messaging. They are highly connected digitally and engrossed in their devices, and their brand choice drivers are different from others. To remain relevant among them we create and roll out innovative campaigns that enhance the travel experience,” she says.

MILLENNIAL MARKET

Russian Standard’s Chirilescu is in no doubt about the importance of this millennial market either. “Our main task is to talk to millennials about the Russian Standard brand in their own language, via social media and unique shop floor experiences that they can bring home and share with family and friends,” she says.

With this in mind, the brand is working on a new activation that, as Chirilescu puts it, “taps into the craftsmanship trend”. She adds: “We will provide millennials with a unique experience to create their own cocktails, and to educate consumers on the versatility of vodka.”

Adapting to changing consumer demographics isn’t all vodka has to worry about, though. Hitting the right note with marketing activity and new releases is one thing, but it seems the space for these within white spirits is more crowded than ever.

“There’s an issue around floor space given to activations. Some are literally crammed in and offer no value to anyone in the value chain,” according to Simmons. “Activations in vodka aren’t as widespread as they are across, say, scotch, probably because gin is stealing the limelight at the moment.”

Chirilescu agrees. “The number of gin brands is staggering. You may find more than 20 gin brands in a single airport store, which creates additional complexity and competition for vodka brands, as we target the same shoppers.”

And while these pressures from within the spirits category are very real, the category isn’t without external pressures too. The Duty Free World Council, whose role includes identifying challenges specific to this channel, is aware of regulatory changes when it comes to various aspects of alcohol sales around the world.

President of the council, Frank O’Connell, says. “There has been a growing tendency globally towards more governmental regulation of the alcohol industry in the areas of taxation, marketing, advertising, promotion and labelling with the view to combating alcohol-related harm, which potentially may restrict the ability of brands to flourish in this market.”





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Nick Strangeway

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