“I think we’re at a really exciting time for the Pernod Ricard Travel Retail business,” Greg Ford, General Manager Travel Retail Americas at Pernod Ricard tells Travel Markets Insider.
TMI’s Michael Pasternak sat down with Ford and Aisling Tobin, Head of Marketing Travel Retail Americas, at the 2024 IAADFS Summit of the Americas, just days after Pernod Ricard launched a bespoke product for the region: Royal Salute 21 Year Old Miami Polo Edition.
“For us this is an exciting moment, because long standing, it has been a challenge to get Americas focused product innovation for travel retail. It is a business that I think has not been supported sufficiently by all major suppliers. Asia is a little tough at the moment. And you can say that we are just pivoting. But actually a lot of these plans have been in place now for some time to bring more energy, categories, views and excitement to this region. We’ve actually got quite a few different things that we’re working on right now,” says Ford.
The region is a priority for Pernod Ricard. Ford was just named to the IAADFS Board of Directors and he spoke at the IAADFS Plenary Session appropriately named The Americas – Change and Promise.
Tequila
One category that is experiencing explosive growth in the U.S. is tequila, and Pernod Ricard has plans to leverage its growing agave portfolio in travel retail throughout the region.
Tequila/mezcal sales in the U.S. in 2023 were up 7.9% or $476 million totaling $6.5 billion, according to the Distilled Spirits Council of the United States (DISCUS). That makes agave the second biggest spirits category by revenue in the U.S. after vodka ($7.2 billion) and ahead of American whiskey ($5.3 billion).
“The tequila category has obviously been a burgeoning segment for some time. But we believe that tequila has been relatively untapped from a GTR perspective,” says Ford.
“Domestically you are seeing this explosion of tequila brands as a category. And that explosion leads to more potential to grab new consumers,” says Tobin. “But when we look at it from a GTR perspective, it’s potentially not there yet. And I think that bringing these new tequilas to the GTR consumers is only going to help us bridge that gap.
“The beauty with Pernod Ricard is that we have a full portfolio of tequila offerings with Altos, Código 1530, and then above and beyond that we have our Avion Reserve 44 and Avion Cristalino.”
Pernod Ricard is experiencing growth across all of these tequila brands, says Tobin, specifically mentioning Código 1530, which Pernod Ricard acquired in October 2022, adding its range of Ultra-Premium (Blanco, Rosa and Reposado) and Prestige products (Añejo, Barrel Strength Añejo and Origen Extra Añejo).
“You’re going see a lot more activity around Código in the Americas. There will be large scale activations for Código at JFK with DFS, who we are excited to be partnering with there.
We are also be working with Avolta on a wide scale activation plan, with particular focus in the Americas. We are looking at doing something in Boston and Las Vegas that will help bring the consumer from the on-trade on-premise to the airport,” says Tobin.
“It is an exciting opportunity. We did something similar last November with Martell cognac in Atlanta, where we partnered with the domestic team, who looked at Atlanta airport as having millions of passengers coming through there with millions of eyeballs. Georgia per capita consumption is the largest in the country for cognac,” says Ford.
Ford says there is an enormous opportunity for tequila in travel retail in the region.
“There were a lot of supply issues for tequila post-pandemic. The tequila category in general was kind of piecemeal, where a lot of people were bringing in whatever they could get. So you ended up with a confused range that was neither cohesive nor well planned. We are now excited to be able to talk and work with the retailers. So how do you really correctly range and merchandise tequila that’s going to be attractive to the shoppers?” asks Ford.
“We have quite a lot of category insights to help the retailers understand the best way to manage that across the category, not just for us. But I think that’s why tequila still has a long way to go within travel retail.”
Skrewball whiskey
Last March, Pernod Ricard announced that it had acquired a majority stake in Skrewball, the world’s first super premium peanut butter flavored whiskey.
Since it was founded in 2018 by Steven and Brittany Yeng, the brand has sold more than three million cases, mostly in the United States.
“Our initial focus in travel retail has been cruise. Because typically you have such an American dominated market there, and they’re already familiar with the brand,” says Ford.
“The U.S. is the main business, but Puerto Rico is a very big market for the brand as well. 94% of the peanut butter whiskey category is dominated by Skrewball.
So for us the question is how can we bring it to life in the airports? I think there will be traction there. We would lead with sampling of Skrewball, because once people try it, they tend to buy it.”
“Skrewball will be one of our most invested in and activated brands across cruise in this coming season. But in airports, we will look to do something in Las Vegas in October, which we’re quite excited about because I think Vegas and Skrewball sounds like the most perfect combination,” says Tobin.
“Liquid to lips is critical for this brand because it will blow any perceptions that you have. One of the key drink specials that we will be serving on cruise is with coconut water in a coconut. So it really kind of plays into that occasion, that moment, and that sweet palate profile when people are on holidays and are there for a good time.”
The importance of cruise
Cruise is a growing part of the Pernod Ricard Travel Retail Americas business, says Ford.
Some 31.7 million people took a cruise in 2023, surpassing 2019 passenger volume by 7%.
“The home of the cruise business is here in the Americas. Almost all the big players are based here. We lead the Pernod Ricard planning for cruise from the Americas. We take point on all of the work globally. And we see sustained growth on the horizon because you can see the ships that have been ordered. We think the channel is going to hit 40 million cruisers by 2027,” says Ford.
But Ford says that while cruise is showing strong green shoots, it is imperative that he is given the right resources to properly activate the Pernod Ricard brands in retail shops and drinks menus on cruise ships.
“The challenge for us in travel retail is always that, for obvious reasons, everything is geared towards supporting airports. And I mean that in terms of all the marketing assets, the plans, etc. So you have to work harder in travel retail to get what you need for cruise. We like to collaborate with our partners in the domestic teams to try and understand what the trends are,” says Ford.
Differentiation onboard is key, says Ford.
“A lot of the time these big cruise lines want to be able to differentiate from each other and give a specific experience to the guests that they can’t get somewhere else. So they rely on brands like us to try and create something that’s very tailored. I think it’s important to help build the relationship more broadly with these cruise lines and have a long-term partnership.”
Late last year, Pernod Ricard Travel Retail Americas exclusively partnered with Celebrity Cruises to feature Rabbit Hole Distillery on the brand-new Celebrity Ascent.
Three Heigold Single Barrels from the Artist Series Single Barrel Program were created especially for Celebrity Ascent. The packaging for each season of barrel releases is unique and features a different series of six original Limited-Edition illustrations commissioned by Rabbit Hole’s Founder, Kaveh Zamanian, and bottled at cask strength. Guests aboard Celebrity Cruises are able to enjoy Rabbit Hole through a series of signature offerings that include cocktails, whisky tasting flights and the three special single barrel selections.
Tobin says Pernod Ricard has also created a cruise specific bottle for Malibu rum, one of the company’s biggest brands on cruise.
As Ford tells TMI, these are exciting times for Pernod Ricard Travel Retail Americas.
“There’s a lot of different dynamics in the Americas that you have to try and balance. Your business in Canada is very different to what you’re trying to do in Brazil. And that’s always going to be part of the challenge and the fun of working here. But at the same time, I think to have this kind of critical mass of brands and activations that we can really get behind, that is going to be really relevant to the shopper here,” he says.
“I’ve never seen the team more excited about the outlook of activity that we can do. We can be seen as the region that’s driving new trends within travel retail, which can then expand out to Dubai or Asia in the future.”
