CHAMPAGNE CONTINUES to perform well in travel retail, despite worldwide sales stagnating and exports within Europe slowing measured against those shipped to countries outside the EU. The latest IWSR figures show growth in the sparkling wine category as a whole of 4.4% in terms of volume (2017 vs 2016) to 1.6m cases and 7.2% in terms of value to US$710.2m.

Within the wider sparkling wine category, while champagne accounts for only 52.6% of the volume, up 2.6% on 2016, it still commands the lion’s share of value with an 80.1% slice worth US$568.87m, up 6.2% on 2016. Other sparkling wines are growing quicker in both volume, up 6.5% and value up 11.5%, but this is a sector where champagne still has that extra cachet and revenue from sales is four times the US$141.33m all other sparklers take.

In line with predicted future growth in sparkling wine consumption in many major domestic markets, IWSR expects champagne volume to rise by 1.8% between 2017 and 2022 and value to rise by 4.1% in the same period. The 10m bottles sold put travel retail as a whole in fifth place above Belgium, Australia and Italy, export markets number five, six and seven respectively, in 2017.

And travel retail is not just about the volume sold. As Olivier De La Giraudière, who looks after this channel for Lanson, succinctly puts it: “This is a market you have to be in when you want to be considered as an international brand. It’s about visibility, it’s a benchmark for your international standing.”

A sector whose entire raison d’être used to be about buying at an advantageous price to the domestic market, has come a long way over the past decade. “It’s constantly reinventing itself in terms of the merchandising, customer experience and product offer,” says Myriam Renard, global duty free director who has looked after travel retail at Vranken Pommery Monopole for the past 16 years. “It has survived geopolitical upheaval, a major retailer shake-up because of numerous mergers and acquisitions, plus radical change in the travel market itself.

“Brands have had to rapidly adapt and be creative and, most importantly, innovative, to meet retailers’ and customers’ demands,” says Renard. “Gift boxes, limited editions and novelties are a must, with dynamic merchandising key to catching the traveller’s attention, while seasonal promotional offers are essential to generate sales.”

The main challenge for the operators is to convert the airport shopper into a buyer. The passenger decision-making has to be fast here and activations to generate faster impulse buying are not just welcomed, but demanded by the operators, as they deliver sales,” says Renard. Enhanced security at airports has considerably reduced the time consumers have to browse and shop.

“For the launch of Pommery Cuvée Royal Blue Sky, because not all passengers are familiar with the consumption of champagne on ice, we worked with dedicated hostesses, offering tastings at point of sales and explanations about the concept itself. This new cuvée is without a doubt our big success story of 2017 and the first half of 2018,” says Renard. At Cannes this year it will be releasing a new Blanc de Blancs cuvée in the upmarket Apanage range, plus Louis Pommery sparkling wines from California and England.

SUMMER DESTINATIONS

Moët Hennessy also continues to push its off-dry style – Moët Ice Impérial, the first champagne designed to be enjoyed over ice – “targeting summer destinations to catch holiday traffic with our activation of Ice Impérial in hubs such as Ibiza, Palma de Mallorca, Nice, Paris, Singapore and Sydney,” says Laurent Boidevezi, president & regional director at Moët Hennessy. And travelling consumers can discover how “life tastes better in colours” with the Veuve Clicquot Colorama activation featuring Veuve Clicquot Rich, inspired by mixology in Paris, Barcelona, London, Dubai, Hong Kong and Sydney.

“In October 2017 we partnered with Heinemann Australia to launch Ice Impérial Rosé in Sydney Airport, where travellers could discover this fresh rosé champagne exclusively for a time, before being launched in downtown stores. We believe airports are the perfect place to propose exclusive offers to discerning consumers. We continue to see strong growth in airport business, eurozone and APAC-led cruise lines and inflight pouring,” he says. “Our strong results are a validation of our strategy focused on value creation, achieved by driving the mix and avoiding price promotion.”

New ways of personalising purchases, which he sees as “particularly important on the travel retail market”, are being rolled out this year. “First, the Veuve Clicquot ‘magnetic message’, which will be available in key hubs worldwide this summer. This was inspired by Veuve Clicquot’s winemakers, who use a pencil to jot down their notes about each wine before they proceed to the all-important act of blending. Each giftbox of Yellow Label or Rosé features a playful pencil magnet just waiting to be personalized.”

On the same theme, the Moët & Chandon ‘personalisation machine’, which is already in operation at Les Caves Particulières in Paris Charles de Gaulle Airport, will be seen in other worldwide hubs in the run-up to the year end, when gifting becomes more prominent. “Consumers can choose a festive message and personalise their bottle in gold script. The service is fun, fast, and the consumer can witness their bottle being dedicated just for them,” notes Boidevezi.

Moët will also launch festive limited editions for brut, rosé, and Nectar Impérial. And with head winemaker Richard Geoffroy retiring at the year end, there’s also the Dom Pérignon 2008 Chef de Cave Legacy Edition, which celebrates the handover of the cellar keys to Vincent Chaperon.

In the prestige cuvée sector of this channel, Moët Hennessy is the biggest player. “Well over half of Champagne’s super-premium market belongs to our maisons; Dom Pérignon, Ruinart and Krug. And these three houses are seeing very healthy growth,” says Boidevezi.

As the third largest champagne brand worldwide, Nicolas Feuillatte has been working hard to gain the same recognition, and become one of the prominent brands, in travel retail. “Our ranking in this sector is now up to third, according to IWSR,” says Feuillatte president Christophe Juarez. “We’ve been enjoying double-digit growth in travel retail markets, with the cruise line category particularly dynamic in the first half of 2018. We’ve been working with Seabourn cruise line on Caribbean and European routes for the past seven years and MSC cruises in Italy. It’s a captive audience, with onboard consumption rising thanks to pouring programmes and a huge increase in passenger numbers.

“The US is our number one priority. It is historically a very strong market for Nicolas Feuillatte and we want to increase our market share,” says Juarez. “Our exclusive contract with the Cirque du Soleil 20-month roadshow across major cities in North America will attract a wider audience, perhaps a younger one too, that frequently commutes by air to the venues. Potential new consumers who will appreciate pouring programmes on American or United flights.”

Elsewhere too, “airlines still represent a fair amount of our travel retail business worldwide. We currently work with major companies on all continents and have new listings this year with ANA, JAL, LATAM, Thomas Cook and Air Australia”.

Deepa MD, who is Pernod Ricard global travel retail brand director for Perrier-Jouët and GH Mumm, sees travel retail as an “attractive channel which provides brands a unique platform to engage with a premium audience in a luxury environment”. Perrier-Jouët Belle Époque continues to be the focus of activity with the new-look Mumm Cordon Rouge and Rosé due to be launched next year.

Bollinger targets the key airport hubs in Europe, the Middle-East and Australasia, says UK brand director Victoria Carfantan. “It’s about visibility and expanding our brand awareness among international travellers. Travel retail is the eighth largest market for Bollinger overall so it’s significant and we see more growth potential.”

“Travel exclusives, price promotions, gift packaging and offering an experience or some theatre in store,” is what Taittinger sees as central, says Lynn Murray, marketing director at Hatch Mansfield, the brand’s UK agent.

In line with this “we produced a special limited-edition bottle for the World Cup in Russia which went into world duty free as a twin-pack exclusive in April/May.

“It’s very much a brand driven sector where customers seek out the reassurance that brands offer,” says Murray.

CHANGING PICTURE

Deutz exports less today, with 40% of its sales outside France, than it did in the 19th century, but that is gradually changing under Fabrice Rosset’s leadership. “Export business will be our priority for years to come and part of that is to establish a strong presence at international airports,” says Rosset. “Aelia/Lagardère is an important partner for Deutz, a great company with a perfect understanding of the culture of the brands it chooses to represent. We’re pleased with the business started with Heinemann too. It’s not in the Deutz DNA to be heavily promoted and even less, discounted. But things such as the three 37.5cl Têtes de Cuvée pack of prestige lines – William Deutz, Amour de Deutz and Amour de Deutz Rosé – is ideally suited for the right, luxury outlet.”

While Deutz believes it is the only house offering half bottles of three prestige lines, at the other end of the market Lanson does a twin pack (0.4l) of Black Label Brut and Rosé – something Giraudière says no-one else is doing – priced at €22.90, which Heinemann positions next to the cash tills, encouraging impulse purchases and leading to regular business throughout the year.

Moët Hennessy sees the travel retail market as an experimental laboratory for brands. Ideas that work here can end up in the high street.

“In retail spaces such as Paris’ Les Caves Particulières and Hong Kong boutiques we can express ourselves fully with a dynamic product offering limited editions for collectors and gifting, as well as Art of Gifting services,” says Boidevezi.

Some domestic markets in Europe may be stagnating but this will continue to be an area of growth.