• Travel retail holds key to sales
  • Group opens Emporium outlet in Dubai airport
  • Plans similar outlets worldwide
Diageos Emporium at Dubai International Airport

Diageo's Emporium at Dubai International Airport

Diageo aims to double the size of its business in the Middle East within the next five years by selling more premium drinks in travel retail at the region's key airports.

Net sales at Diageo's Middle East and North Africa business (MENA) rose by 16% in its most recent fiscal year, to the end of June 2010, the Johnnie Walker and Smirnoff owner said this week.

"We've got a very clear vision about doubling our MENA business by 2015," said Diageo's general manager for the Gulf region, Hugo Mills. Diageo does not detail specific sales figures - including value amounts - for its MENA business, which is part of the firm's 'International' division.

Travel retail sales, from the new Johnnie Walker Double Black to The John Walker at US$3,000 per bottle, are expected to drive growth in the Middle East as authorities work to expand passenger capacity at airports in Dubai and Abu Dhabi.

Diageo this week opened its 'Emporium' premium drinks outlet at Dubai airport, marking what Mills believes is "the biggest thing we have done in travel retail". Emporium is designed to attract business people and wealthy travellers who would normally head straight for one of Dubai airport's executive lounges.

"There are a lot of affluent people with disposable income and a lot of time on their hands," said Mills. Consumer research shows that only a fifth of travellers browse the duty-free spirits aisles and, of those, around half leave with a bottle.

Both Dubai and Abu Dhabi are vying to become global travel hubs. Around 46m air passengers are expected to have come through Dubai in 2010 and this is forecast to reach 52m in 2011. Abu Dhabi is smaller, but passenger numbers are expected to quadruple to around 40m in the next five years.

Diageo has already stated that it plans to double the value of the overall global travel retail business by 2015, to US$12bn. The Emporium outlet in Dubai, which includes a bar and tasting area stocked with the company's most expensive drinks from Zacapa rum and Tanqueray Ten gin to Johnnie Walker King George V, is a blueprint for other airports.

Jane Ewing, head of Diageo's Global Travel and Middle East division (GTME), said that the company plans to work with authorities and retail groups in the top 14 airports around the world to develop high-end outlets similar to Emporium in Dubai.

Read the just-drinks blog for more details on Dubai.