Liqueurs report: Travel Retail

While trading conditions in key markets are far from ideal, leading liqueur brands are stepping up their focus on travel retail, as Joe Bates reports

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IN VOLUME TERMS THE LIQUEUR CATEGORY HAS HAD A TORRID TIME IN TRAVEL RETAIL OF LATE. Overexposed to both European and North American markets, where passenger growth and retail spend have struggled since the great recession of 2008, the liqueurs sector has simultaneously failed to make a serious impact in fast-growth emerging markets such as Asia/Pacific. As a result, sales declined by almost 3% in 2013 to 2.18m cases, according to IWSR research. 

The category’s travails are exemplified by market leader Baileys, which still enjoys a dominant category share of more than 28%. Despite a series of flavoured line extensions and the roll out of the premium Baileys Chocolat Luxe, sales of Baileys in GTR slipped back a worrying 10% in 2013 to total 620,300 nine-litre cases, according to IWSR figures. 

Not every major liqueur is facing the uphill challenge of Baileys, however, and, while overall sales volumes for liqueurs in travel retail might not make for pretty reading, brand owners are slowly taking the travel retail sector more seriously. Indeed, the growing consumer interest worldwide in making cocktails at home and the increasing numbers of people from emerging markets such as China and Brazil travelling abroad have led to a number of liqueurs being launched exclusively for travel retail. 

A prime example of this trend is this year’s launch of Cointreau Blood Orange: the first travel retail exclusive flavour ever released by Cointreau. Priced at the same level as a standard 1-litre bottle of Cointreau, the new 70cl Cointreau Blood Orange is made from blood oranges grown on the island of Corsica, and described by La Maison Cointreau master distiller Bernadette Langlais as a “new expression” of the famous liqueur rather than a “new flavour”. 

Blood oranges are clearly the trendy flavour of 2015 as the red-fleshed citrus fruit is also the signature ingredient of another travel retail exclusive liqueur launched this year: Southern Comfort Blood Orange. Like Cointreau Blood Orange, Southern Comfort Blood Orange is the brand’s first line extension exclusive to travel retail. It went on sale with World Duty Free Group (WDFG) at its airport stores in the UK, Spain, Finland, Germany, the US and Canada in May for a three-month period before a wider roll out. 

And, while Baileys might be struggling, rival cream liqueur Distell-owned Amarula, the third best-selling liqueur in travel retail, is going from strength to strength, growing by more than 17% in 2013. Robyn Bradshaw, general manager duty free/travel retail, explains that this year the company has been jointly promoting both the flagship Amarula and the newly launched clear, higher-strength 30% abv Amarula Gold at key travel retail locations. 

“Made to be mixed, Amarula Gold offers a very different expression of the unique marula taste from the velvety cream option,” explains Bradshaw. 

“We have focused on tasting activations, where we know Amarula Cream responds well, but wherever possible have also included Amarula Gold to encourage shoppers to widen their brand repertoire. 

“We have been following this approach from São Paolo and Rio de Janeiro to Melbourne, Johannesburg, Bali, Moscow, Copenhagen and Milan and a range of other destinations, and are seeing very good growth.” 

Back in Europe the peak summer travel period provides liqueur brands with an ideal promotional platform to raise their profile with key traveller groups. 

For instance, Diageo Global Travel and Middle East (GTME) teamed up with London Heathrow airport and World Duty Free Group (WDFG) in July to promote Pimm’s, which sells around 54,000 bottles at the airport each year (more than a quarter of these are sold to passengers travelling to the US). 

To reinforce Pimm’s British credentials Diageo and Heathrow set up a croquet game in the middle of Terminal 2, which was furnished with eccentric obstacles such as rose bushes and pink flamingos. Using laser-guided mallets and musical hoops, passengers were able to play a quick 15-minute game and sample a Pimm’s Cup afterwards. 

For the length of the promotion WDFG placed Pimm’s on a special price of £9.99 per bottle.  

Pernod Ricard-owned Malibu has also been targeting British young 18 to 30-year-old holidaymakers this summer at both London Gatwick and Manchester airports. With some 2m travellers passing through Gatwick last month, Malibu took over World Duty Free Group’s sampling bars in both the airport’s terminals, decking them out with tropical props such as palm leaves, pineapples and flamingo motifs. 

Pernod Ricard Travel Retail Europe brand manager Libby Wilding explains that the promotional activity was timed to peak with International Piña Colada Day on July 10th. Thus, the Piña Colada cocktail was the lead serve throughout the promotion, but travellers were also offered the less sweet Malibu Black Light, a European travel retail exclusive, as an alternative choice. 

“A key objective for Malibu is to drive awareness of this exclusive product and educate passengers about the versatility of the brand,” says Wilding. 

Another element of the activation was an in-store competition for travellers to win an all-paid trip to the Ibiza Rocks music festival in September. Potential customers were also tempted by an on-pack ice-tray gift with purchase as well as temporary gold-coloured tattoos, free fake palm trees and Malibu logo transfers.  

While Pimm’s and Malibu are clearly keen to drive incremental volume sales during the peak summer months other liqueur brand owners see travel retail as an ideal environment to persuade travellers to trade up to higher-priced purchases. For instance, Grand Marnier has just released its cuvée Louis Alexandre into selected travel retail outlets. 

With its silver seal and blue label, this special blend of Grand Marnier was inspired by founder Louis-Alexandre Marnier Lapostolle and uses older cognacs than those used in the regular Cordon Rouge. 

“Travel retail shoppers are the perfect target when it comes to fine products [such as this],” says Anne-Claire Delamarre, international director luxury wines & spirits Europe, the Americas, Middle East, Africa & global travel retail. 

“Our cuvées are a new proposition for travel retail at the intersection of the liqueur and cognac categories,” she adds. “Grand Marnier is one of the few liqueurs with this opportunity since it is a cognac-based liqueur.  

“We have introduced the cuvée in WDFG and Dufry America, and so far results have been better than anticipated.  There is a strong opportunity for Grand Marnier to upgrade its core consumer toward a more sophisticated aged proposition.” 

According to Delamarre, a key part of Grand Marnier’s strategy is to use duty free as a vehicle to raise the brand’s profile in Asia. Other liqueur brands are also keen to grow their business in this fast-growing market, but the herbal liqueur brand Bénédictine is unusual in having a well-established trading base in the Far East with around 85% of its export sales generated in just one market: Malaysia. 

For that reason brand owner Bacardi has decided to create an exclusive version especially for the Asian travel retail market.  

 Launched earlier this year in time for Chinese New Year, the €65 Bénédictine 1868 Gold Medal Limited Edition was inspired by the year the liqueur won a coveted Gold Medal at the Paris International Exhibition. 

Featuring special gold-themed packaging for the Asian market, this line extension was stronger than traditional Bénédictine at 43% abv and based an original recipe of the liqueur’s creator, the Venetian monk Dom Bernardo Vincelli.  

As part of the product’s launch activation at Singapore Changi airport, which was staged during the peak travel and gift-giving period of Chinese New Year, brand ambassadors offered passing travellers traditional red (hongbao) envelopes (a symbol of New Year good fortune) secured with a Bénédictine DOM wax seal, which contained a message inviting them to sample Bénédictine DOM at the store’s Mix-It bar.   

With a focus on encouraging younger consumers try Bénédictine DOM for the first time, the cocktail menu created for the launch featured new contemporary pairings such as The Benediction, a blend of Bénédictine DOM and Martini Alta Langa, a dry sparkling white wine; or Bénédictine DOM with rose tea. Other options included Bénédictine B&B, a blend of Bénédictine and brandy, or Bénédictine 1868, neat over ice or with lemon zest or wedge.

Whether other liqueur brands have the resources and commitment to stage such well targeted and executed promotions in key emerging market travel retail locations in the years ahead will be key to the category’s long-term chances of success.