Amid difficult trading conditions in many of the world’s leading beverage alcohol markets, greater attention naturally turns to the limited number of bright spots, including – most obviously – India, but also global travel retail (GTR).
GTR has always been a fascinating channel. In Europe especially, its roots lie in the duty-free culture that turned travellers into bargain hunters; but intra-EU duty-free was abolished more than a quarter of a century ago, leading to the gradual transformation of GTR from a ‘pile it high’ discount vehicle into a venue for gifting (both for others and for oneself) and trading up to more expensive tiers.
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Rather than seeking out a price that they couldn’t find elsewhere, shoppers were now drawn to products they couldn’t track down outside airport shops. To this day, GTR-exclusive expressions are a key weapon in the armoury of brand owners, reinforced by the economic model and inherently slim margins of the channel.
Almost paradoxically, GTR both reflects the most significant trends sweeping through the world’s domestic markets and simultaneously remains something of an outlier to those trends, with traditional categories (especially Scotch whisky and Cognac) still accounting for a disproportionate slice of listings and sales.
So: as in regular markets, the GTR business in North America is reportedly relatively soft right now but India is predictably buoyant; in category terms, agave spirits and ‘alternative’ whisky origins (Japanese, Indian, Irish and others) are making inroads into Scotch’s historic dominance.
This evolution has been complicated, in the recent past, by conflict in the Middle East and its impact on air travel through the major regional hubs, including Dubai, Abu Dhabi and Doha. The numbers for the region as a whole won’t make for pretty reading this year.
Anecdotal reports suggest that Indian travellers – an increasingly vital part of the GTR consumer base – have kept moving
Some of these losses, however, are made up for by gains in other parts of the world. Anecdotal reports suggest that Indian travellers – an increasingly vital part of the GTR consumer base – have kept moving, turning their gaze east, rather than west, to the broader Asia Pacific region. Growth is aided further by the increasing sophistication of the GTR channel in India, permeating a growing number of airports, and by the rising investment levels by brand owners, leading to fierce competition.
While Indian consumers in general – especially among the younger age cohorts – are showing clear signs of greater experimentation, exploring more diverse categories such as agave and gin, the Indian predisposition to whisky makes this good news for Scotch in particular, but also for other origins, including Irish whiskey and Bourbon.
The whisky picture is complicated somewhat by the progressively more significant role played by the other whisky origins mentioned above; in a world where nationalism (not to mention protectionism) are more and more prevalent, consumers are increasingly drawn to the credible and high-quality whiskies coming from their homelands.
India is the clearest example of this, with locally produced single malt now outselling its Scotch equivalent at certain price points in the domestic market, but there are others, including Taiwan, Thailand and China, where the ‘guochao’ phenomenon – pride in local culture – should not be underestimated.
Scotch whisky brand owners need to be aware of this shift but, at the same time, I don’t think they should seriously worried at the moment, since Scotch remains the benchmark for many travellers, especially when trading up or exploring gifting opportunities. The further up the price chain you move, the truer this is – and Cognac’s structural decline is not unhelpful in this regard.
Scotch remains the benchmark for many travellers
Meanwhile, Scotch’s own challenges – chiefly the imbalance between supply and demand, thanks to over-production in the past several years – can also yield opportunities. As inventories remain high, but with a lower value in current market conditions, more distillers will feel able to release age-stated products at more ‘realistic’ price points than has been the case recently. Purists may argue the toss about whether age statements are a true signifier of absolute quality, but they remain a useful value shorthand for GTR shoppers.
Increased diversity in the duty-free whisky aisles can also be a positive for all participants in the broader category, freshening up the whisky offer beyond the ‘same old’ brands and origins. Some will be winners, some will be losers, but rising interest levels in ‘new news’ can only be beneficial overall.
Travel retail evolves – sometimes painfully slowly – as the influence of different categories and consumer groups rises or ebbs, but certain truths about the channel persist, including the undeniable benefits of GTR-exclusive products and packs, accompanied by an experiential element that can help individual brands to stand out from the crowd.
GTR’s current isolation as one of the few growth pockets in the global marketplace makes it more competitive than ever, but the rewards, both in terms of pure sales and the marketing boost offered by GTR’s fabled ‘shop window’ status, make it a must-have for any credible spirits brand in 2026.
