“What we need is to get English sparkling wine into UK airport Duty Free shops instead of some of the big-name Champagne you always see there”.
This was just one of the responses to my post last week, in which I asked who was going to drink the enormous volumes of English sparkling wine that is on its way.
English fizz is certainly high quality enough to be placed in Duty Free. The problem comes with getting a listing.
The inconvenient truth that I didn’t properly understand when I was a critic was that the quality of the liquid and its price are only two of the factors any big buyer has to consider. Indeed, when it comes to Duty Free – or Travel Retail as it is more properly known – the quality is almost irrelevant.
What attendees of the annual Tax Free World Association trade fair in Cannes are looking for is anything - perfume, fashion, jewelry, watches, cameras, tech, confectionary and alcohol and more – that travellers might buy on impulse while waiting to board a plane or while travelling on a ferry. It could just as easily be a Sarah Jessica Parker Provence Rosé as a Sarah Jessica Parker Eau de Cologne, provided it can be sold at a good profit. Being recognisable and desirable is what counts.
According to a report by ACI economics, airports get nearly 40% of their global revenue from travel retail. Most of this comes from rent, but some airports also take a share of turnover. So, not surprisingly, the retailers drive a particularly hard bargain when negotiating who is going to be given space on their shelves. And major savings for shoppers – like the opportunities to sample the products – will be paid for by the brand owners.
Some smaller wine producers may be able to carry these costs, but they will be the exception to the rule. This is also true for grower Champagnes, which is why you don’t see many of those in Paris airport shops either.
Shallow pockets are only one part of the problem. No retailer likes to run out of stock, and for bigger chains, like duty free outlets or supermarkets, it’s a deal-breaker. Then there’s the boring-but-crucial matter of labelling and logistics. Get the barcode wrong or miss your delivery slot and, however delicious your wine, you’ve lost your listing. The bigger the producer, the more they can invest in getting these things right – to the extent of having employees dedicated to the travel retail sector or even to specific distributors.
Having just interviewed Antoine Leccia, the CEO of the French company AdVini, for the next issue of Meininger’s Wine Business International, and learned that he had appointed a travel retail specialist and briefly funded a pop up tasting area at Charles de Gaulle airport, I was interested to see Champy, Laroche and Cazes – all AdVini brands – all together in the same Heathrow duty free shop.
My guess is that this trend of big retailers buying from big suppliers is only going to grow stronger, while even independent shops increasingly favour buying groups rather than doing everything themselves.
Readers who feel dismayed by this prospect should take a look at their own behaviour. Do they shop in supermarkets rather than trudge around individual stores? Worse still, did they do most of their Christmas shopping on Amazon? There’s always a strong argument for convenience.
If English wine producers want to have a presence in UK airport duty free shops, they may be best advised to find ways of clubbing together to do so, for whatever it may cost. As for other smaller wineries, unless they can make an unusually strong case for their presence in these outlets, I’d recommend shifting their focus to increasing direct sales to consumers.