Well travelled

Despite worldwide challenges, it’s been an upbeat time for champagne in duty free, reports Giles Fallowfield

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IN 2016 THE CHAMPAGNE market saw a slight drop in overall shipments from 312.6m to 306.1m bottles, pretty much reversing the small increase of the previous year. As is typical in a period of recession, the major brands have mostly performed fairly well and their share of the total market actually grew slightly to a 10-year high of 71.7% in terms of volume.

Little dramatic change is expected in 2017, as is indicated by the Comité Champagne’s July 21 decision to set the yield for the just-completed 2017 harvest at exactly the same level as in 2016. It expects sales to stay broadly flat or grow slightly, though in a strife-torn world, making accurate predictions for champagne demand in the second half of the year is difficult, to put it mildly.

In the first half of 2017 total shipments of champagne are up 3.3% versus the first six months of 2016 and while this may only amount to an extra 3.6m bottles – the vast majority of shipments take place in the second half of each year, with the last quarter key for sales – the major houses which dominate export sales, saw 5.4% growth in this period amounting to 4.32m bottles. The big brands will also take encouragement from the fact that, while the market within Europe stagnates, that outside grew for them by 18.9% in the first six months of 2017.

Set against the difficult economic and political background, the performance of champagne in travel retail has been pretty buoyant. According to IWSR figures, travel retail is now the sixth largest champagne “market” having overtaken the Belgian domestic market in 2016. “The Belgian market has had a disastrous 18 or so months following huge duty increases on spirits. This has impacted all the other categories as consumers have gone across to neighbouring countries to shop for alcohol,” says an IWSR spokesman.

Nevertheless, IWSR figures suggest that travel retail has grown its market share of all champagne sales globally to 3.2% in 2016 versus 3% in 2015. France is number one with almost 52% (a decline of almost 1%) and the UK is second with close to 10%. Travel retail’s share of what IWSR calls super-premium – broadly anything priced at more than US$30 – has also gone up from 7.5% to 7.8% in 2016. This is a channel that ranks as the ‘fourth international market’ for super-premium sales, IWSR says.

Donatienne de Fontaines-Guillaume, managing director for global travel retail at Moët Hennessy, notes its champagne brands have enjoyed “dynamic, double-digit growth in terms of both volume and value in the past 12 months”. This year it has again targeted summer destinations to catch holiday traffic with activations built around Moët & Chandon Ice Impérial, launching Ice Impérial Rosé worldwide. And, she says “trendy urban destinations were targeted for Veuve Clicquot Rich activities, also featuring the new Rich Rosé cuvée”. Dubai, Hong Kong, Singapore, Sydney and Madrid were added to more obvious Mediterranean summer holiday destinations such as Malaga, Ibiza, Palma de Mallorca, Barcelona and Nice where these products have already been well received.

At Veuve Clicquot, the clever Journey Collection concept has been revisited and extended with “exciting digital innovations,” says De Fontaines-Guillaume. “Our selection of cities gift boxes has been revamped to include a digitally connected NFC tag and QR code, allowing consumers with all types of smartphones to discover the Veuve Clicquot world online. They can then immerse themselves in a 360° film, travelling to the maison’s iconic addresses, either on their smartphone, or with a VR mask available in airports.”

This all works because people have more time on their hands at airports and for the digitally savvy millennials, who may not have the time to visit the maisons or see the vineyards, it’s a way for them to connect with heritage and ‘savoir faire’. “It’s the future of tradition,” she says.

HOLIDAY GIFTS

As the holiday gifting season approaches, Moët will be introducing an “enchanted limited edition”, which will have a ‘glittering’ on-shelf impact and be shown to its retail partners at Cannes TFWA, during which travellers passing through Paris Charles de Gaulle and Nice airports will also see the new Ruinart activation, showcasing ‘the exotic singularity of Ruinart Rosé’.

“Our consumers are looking for memorable experiences and exclusive offers, as well as limited editions and personalised offers. The travel retail market serves as an experiential laboratory, boosting brand desirability and bringing our maisons into direct contact with the travelling consumer.” It’s clearly a great testing ground for new ideas that may later find a wider domestic application. “Innovation working in partnership with retailers is a key part of the approach in meeting the challenge of driving footfall,” De Fontaines-Guillaume says.

Innovation has long been a strength of Piper Heidsieck and now owner EPI has reorganised distribution and addressed important issues about the brand’s positioning in top domestic markets – travel retail is an obvious place to underscore that repositioning. Benoît Collard, executive vice-president of Piper-Heidsieck, says: “We spent 2016 reviewing the way we want the brand to communicate and reveal itself, to better emphasise the quality of the house. After a year of planning, 2017 is about putting that plan in place and we are already seeing some great results.”

Demand reflects the strength of domestic markets and for Piper the most important hubs are Heathrow, Paris, Frankfurt and Hamburg. “I’d include Australia here, as the [domestic] market there is also very strong. Then there are hubs whose importance goes beyond the domestic markets, places such as Dubai and Hong Kong, for example.” says Collard.

“Travel retail business was built on the duty advantage historically with deals and bargains and this demand still exists in certain places. That’s why ‘arrival shops’ are still important for business in some locations.” But he also notes the wider travel retail experience has changed radically as modern stores have become a shop window for more premium products. “Travel retail outlets increasingly have a similar feel to them as premium department stores. We’ve given [retailers] the opportunity to list our premium wines, only available in prestige outlets, with the chance for some added value.” Not just ‘Rare’, Piper’s prestige cuvée, but also new wines such as Essentiel, the new longer-aged, lower-dosage, more elegant, Extra Brut blend aimed at the on-trade and up market department stores. Essentiel is already sold in Charles de Gaulle, Frankfurt and Hamburg airports, says Collard. It has also released a lipstick-shaped, cool-box presentation picking up on brand themes of “seduction, glamour and celebration”, all aimed at pulling in the millennial audience.

In line with Collard’s assessment, François Plantecoste, business acceleration director at Mumm and Perrier-Jouët, says in mature champagne markets such as Europe, sales are driven by value-for-money and specific deals while there’s an opportunity for showcasing in other regions. “We will renew our theatralised pop-up space in Miami Airport with Perrier-Jouët, with a new concept featuring the artist revealed during the Design Miami art fair.” Perrier-Jouêt is the fastest growing champagne in GTR, for the second year running gaining momentum, Plantecoste says: “But Pernod Ricard champagnes do not have their fair share in GTR yet, so we see room for further growth in this channel”.

At Vranken-Pommery-Monopole, global travel retail and airlines director Myriam Renard, takes the view that it’s “our duty to give our customers the chance to find our champagnes, wherever they are when they travel, whether it be in their favourite restaurant in Asia, on their preferred rooftop bar in the US or on the airline which takes them there”. To this end prestige Cuvée Louise is in Lufthansa first class, Pommery Brut Royal and Grand Cru 2006 on board United Airlines and Heidsieck Monopole Silver Top with Air France.

The company doesn’t design new products specifically for this sector, but with a large range to choose from, works closely with the operators to find the most relevant, according to the nationality of the passengers.

Like other houses with new, off-dry champagnes styles for mixing or drinking over ice, Pommery is pushing its latest Royal Blue Sky release in what it sees as the perfect environment for such a drink. It will be showing it to travel retailer clients at Cannes, along with, at the other extreme, the new Brut Nature (no dosage) version of Pommery Cuvée Louise 2004. Put together with POP in quarter-size bottles in a four-pack, art collectors, limited editions – “one of our best sellers in the travel retail channel,” says Renard – and you’ve nearly all points covered.

DO BETTER IN ASIA

Christophe Juarez, the new directeur général at Nicolas Feuillatte CVC reports a “dynamic start in 2016 in the global travel sector, with significant growth in all sectors: airlines, cruise line and duty-free, in line with our objectives”. He adds: “Our main customers are still airline companies. Historically we’ve had a good foothold in the European markets and still do, but we’ve had a very nice development in America this year. We still need to do better in Asia, but we are working on this.

“We think of ourselves as the winegrowers’ grande marque. But as we are only 40 years old, we are the youngest grande maison de Champagne and we still need to attract new consumers and invite them to taste our cuvées. We see travel retail as a great shop window for affluent customers to find the brand.

“Nicolas Feuillatte is served on board several airlines, mainly in business, but also in first class. The Brut Réserve, which is our flagship NV cuvée, is our bestseller, but we’ve also created a travel retail exclusive in the shape of Collection Particulière Champagne by Nicolas Feuillatte for Camus. We offer tailor-made packages for each client to help them express their own positioning in the market. In this respect, the size of our company is a real asset as it allows us to be both flexible and reactive,” says Juarez.

For Lanson, last month (September) saw the launch at Charles de Gaulle airport of its new, limited-edition Music Box packaging, which enables amplified sound when linked with your smartphone. Basically, using it as a speaker so you can play your favourite sounds while sipping Black Label or Lanson’s rosé. Olivier de la Giraudière at Lanson says it is in discussion with retailers about listing prestige lines such as the single vineyard Clos Lanson and the just released Ecocert certified Green Label Organic cuvée.

De la Giraudière notes that “outlets doing best in the prestige market are the ones welcoming a significative proportion of Asian and South American travellers”.

Lynn Murray, brand manager at Hatch Mansfield, UK agent for Taittinger, says Europe is the most important area for the brand with key hubs in the UK, Scandinaivia, Amsterdam, Madrid and Zurich. “Sales are primarily driven around price promotions on twin packs, with purchases for gifting; consumption on arrival at holiday destination; and discovering something not readily available locally – so it’s a good place to encourage trial on new cuvées,” says Murray. “Supplying the champagne in premium gift boxes is key.”

The fact that a brand such as Bollinger is getting more involved in the travel retail market says a lot about how this sector has become more ‘luxury friendly’, for, as Guy de Rivoire, Bollinger’s global sales director, says: “We are not a promotion-focused brand.” In travel retail, he adds: “Brand recognition is prime, together with visibility, and retailers like bespoke offerings, for instance our Bollinger 007 limited editions. This sector has been growing for us over the past few years, though it still accounts for a small proportion of our volume.

“With the number of international travellers set to grow, we expect to benefit from some further visibility and distribution,” says de Rivoire.

Sales are currently mostly derived from “the UK, mainland Europe, Australia, Dubai & Hong Kong, but we see Australasia and North America as areas of developments for Bollinger”.

The travel retail market for champagne looks set to grow at a faster rate than the overall market, at least in the short term.