Page 58 - TFWA World Exhibit 2024 Special Edition

INSIDER

IWSR: GTR spirit sales above pre-pandemic levels for value as premiumization
remains key segment driver

Beverage alcohol sales in the global
travel retail (GTR) channel have overtaken
pre-pandemic levels in value terms – but
volumes remain persistently soft due to
shrinking basket sizes and fragile consumer
confidence, according to the latest market
data from IWSR.
Total beverage alcohol volumes in
GTR rose by +5% in 2023, but remain
down in the longer term, having decreased
at a CAGR of -4% between 2018 and 2023.
The value picture, however, is
altogether brighter, with revenues up by
+21% in 2023 alone, and rising at a CAGR
of +3% between 2018 and 2023. Value has
grown 14% over 2019, but volumes remain
down, by 18%.
“Helped by price increases and a
resilient premiumization trend, the value Tequila and champagne helped to drive travel retail sales in 2023. Above: Pernod Ricard
of the global travel retail channel is now Global Travel Retail launched Código 1530 Tequila in travel retail with a vibrant pop-up
ahead of 2019 levels,” says Charlotte Reid, event at Terminal 4 in New York’s JFK Airport this July. Below: Champagne Lanson launched
GTR Senior Insights Manager, IWSR. Le Black Creation last year with an increased level of airport activations.
“Footfall is now pretty closely aligned
with previous levels, but shrinking basket +5% between 2023 and 2028 – outstripped helped to drive overall travel retail
sizes highlight more cautious post- by anticipated value growth of +7% over performance in 2023, but there was
pandemic consumers, with confidence the same timescale. subdued growth for whisky and rum – and
impacted by day-to-day inflationary falls for gin and vodka
pressures.” Global travel retail beverage alcohol Champagne, agave-based spirits
IWSR says that there is an expectation trends and Cognac all saw double-digit volumes
that GTR will continue to outperform the IWSR identified a number of key growth rates, with agave spirits and Cognac
global wine and spirits market in the years trends for beverage alcohol in global travel expected to grow strongly in the coming
ahead – but volumes will continue to come retail. years. Tequila in particular is building
under pressure, with growth falling slightly Premiumization remains an important momentum beyond the U.S. and Mexico,
below the anticipated increase in passenger facet in global travel retail, as consumers and in Europe and Asia especially
numbers. are continuing to trade up. Within spirits, However, a decline for blended Scotch
Geopolitical pressures, most notably there has been a rise in promotional activity (-3% in volume, 2022-23) impacted overall
the conflicts in Ukraine and the Middle in the super-premium and ultra-premium whisky performance in all regions except
East, will also impact growth levels, along price band levels through price strategies for Asia Pacific. By contrast, single malt
with the results of a number of elections in and larger presence of twin packs and 70cl. Scotch and U.S. whiskey added volume to
major markets, and the general health of This is driving sales and accounting for the category in GTR during 2023 (at +24%
the global economy. almost US$4 out of every US$10 spent and +18% respectively).
As a result, IWSR forecasts expect on spirits in this channel. This trend is The overall Scotch category is
that GTR volumes will rise at a CAGR of expected to continue, with the volume expected to regain momentum in travel
share of premium-plus products increasing retail in the years ahead, at volume CAGR
from 48% in 2023 to 50% by 2028. of +6%, 2023-2028.
Travel Retail sales in APAC have The GTR audience was already
been vibrant, up 46% in value terms during changing before the onset of COVID-19 in
2023 and +34% in volume terms, with 2020, but the emergence of a younger and
Taiwan, Thailand, Singapore and Australia more female GTR consumer base has to an
returning to pre pandemic value levels. extent been shaped by the pandemic.
India drives the most incremental volume The increased prevalence of digital
and value for the region. makes the channel more relevant to LDA
Meanwhile, Europe remains the most Gen Z travelers, who are keen to use GTR
established region in global GTR – but it to explore and research niche products.
is projected to see its share fall below 50% The cruise sector is now fully
this year as its dominance is slowly eroded. resurgent following the devastating impact
Champagne and agave-based spirits of the COVID-19 pandemic.

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