Whisky Focus - William Grant Sees Positive Results In A Challenging Market

William Grant Sees Positive Results In A Challenging Market


30th January 2017

William Grant sees a healthy growth in a challenging market through innovative and engaging promotions in Global Travel Retail.

Virtual Glenfiddich Distillery in Paris Charles de Gaulle airport.

Despite a very challenging environment in 2016, William Grant & Sons says its business enjoyed a very healthy growth in many Global Travel Retail (GTR) European markets in 2016, which is ahead of the trend and their competition.

According to William Grant & Sons Managing Director GTR, Ed Cottrell the key to their success in the current challenging market is the company's strong working relationships with WGS’s retail partners throughout Europe (and globally) to create innovative and engaging activations that bring its products to life whilst acknowledging the individual personality and DNA of each brand.

"At WGS we believe we’re at the forefront of ever more theatrical promotions and activations that benefit both from the ever-increasing technological and digital advances open to us, as well as deeply creative concepts based around more traditional materials and props," says Cottrell.

For 2017, WGS will continue to put a strong focus on digital marketing and development of social networking to promote its brands, combining promotional activations in airports with online platform activities that offer a 360-degree approach towards customers. "Generally we accept that in travel retail we are, as an industry, somewhat behind in digital and have to collectively work harder with our retail partners to ‘catch up,” continues Cottrell.

As far as markets are concerned, WGS points to tentative signs in the last quarter of 2016 that Russia could be exiting its recession, which has resulted in improvement in its TR business with this region. “While, in comparison with 2014 and previous years, Russian travellers are not yet returning to full their purchasing power, some improvement is definitely being seen – with the exception of St Petersburg which is primarily a tourist airport. However, in other key Russian/CIS airports we have seen sales increases of 20% vs. 2015, which was -50% vs. 2014,” adds Cottrell.

However, WGS notes a change in buyer’s preferences. Value for money and comparisons with Russian domestic market prices are now the name of the game rather than trading up and premiumisation, calling for a balance of product activations and promotions with price-off offers to can yield sales.

Turkey remains a challenging market for WGS – especially given the further terrorist attacks in December – and the company sees no signs of it improving in the foreseeable future. Elsewhere WGS points to changes in Nordic traveller buying habits following oil prices that are now affecting the economy in that country.

Cottrell accepts that 2017 will be no less challenging. "Terrorism during 2016 has meant that Europe has never been seen as more insecure and unstable, which has had a direct affect on the number of Asian travellers. Fewer travellers means increased competition between the producers for market share and a fight for every single sale," he says.

Brexit is also affecting the company. "British passengers are whisky drinkers, and consequently sales in Spain and Portugal have been affected due to currency exchange rate changes since the referendum. On the other hand, the UK is becoming more attractive price-wise, and we have seen sales increase to Asian passengers as the UK is perceived as ‘safer’ than France or elsewhere in Europe. The UK looks set to be a very important market for WGS in 2017."

WGS believes that, aside from the economic issues, there is simply not enough differentiation in airports from the local market, and a proliferation of small and ‘craft’ brands that are flooding the category – making the purchasing decision more confusing than it should be for travelling consumers.

Nevertheless, WGS remains highly positive for its European business in 2017 and beyond. Says Cottrell: “Our remit is to further develop the already excellent business relationships with our GTR Global and European based customers. We place an enormous amount of importance on these relationships, and work together to ensure the right portfolio of product is offered to customers, supported by engaging, fun and educational activations.

"We do place particular importance on The Advantage Group Survey and look carefully at the feedback from customers in order to ensure we are partnering with them in the most effective way. We were particularly delighted with the latest survey in the very positive response from our customers on the strong and collaborative relationships we have with our partners."

You will find the current William Grant, Glenfiddich, Balvenie, Kininvie and Ailsa Bay  whisky ranges available from specialist whisky shops such as Master of Malt
 

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