Diageo Asia Pacific and Global Travel President Sam Fischer has underlined the global drinks powerhouse’s continued, and in fact enhanced, commitment to the travel retail channel.
Speaking with The Moodie Davitt Report Founder & Chairman Martin Moodie in a key Knowledge Hub session at the Virtual Travel Retail Expo today, Fischer said he was “astounded” by the resilience of the channel, and of the Diageo team, during the long COVID-related crisis.
He offered an upbeat, optimistic view of the industry’s future, emphasising collaboration, innovation, premiumisation and the increasing important role of sustainability.
“Travellers are going to be surprised and delighted by what they see in travel retail. This is a critical channel for us,” Fischer said.
“We have had a long history in travel retail and we know that travellers are going to return, they are going to be energised… and we want to be there to ensure that our brands will enhance that experience of travel.”
Click on the video icon to access the full interview with Sam Fischer from the Virtual Travel Retail Expo
Fischer noted Diageo’s support of its teams and customers throughout the challenging COVID crisis and in the ‘new norm’.
“It is all about ensuring that we are in the airports when the travellers return, that we are in the duty free spaces and executing our brand plans,” he said. “We know that premiumisation and digitalisation will continue to be trends and we really want to build plans with our customers that ensure that together we unlock the enormous opportunity we see in this channel.
“The focus will be on investing in brands, supporting customers and supporting our teams, as we emerge stronger.”
Fischer emphasised the importance of speed and agility in executing brand strategies as countries and regions open their doors to travellers. “Our ability to deploy investment resources, activations, and stock to support what we see as a really big surge is going to be defining,” he said.
Fischer believes the current volatility of the travel retail channel offers Diageo an opportunity for closer collaboration with its customers. He underlined Diageo’s strong global footprint and described Asia as a region, and Asian and Chinese travelling consumers, as a “big growth engine” for the industry going forward, with a focus on premiumisation and luxury to support market demands.
He said the strength of the Asian market played well into Diageo’s Scotch portfolio and the development of Scotch whisky globally, on the back of the company’s flagship Johnnie Walker brand.
An omnichannel approach, Fischer said, offers Diageo the opportunity to engage with consumers before they travel and, ultimately, the opportunity to enhance basket size in airport travel retail.
He noted that Diageo intends to use airport experiences to enhance its 2030 sustainability goals, with a focus on product sustainability and innovation. The group’s new Research and Development Centre and its Logistic Centre in China provide insights into the needs of Chinese consumers and to creating channel-specific innovations.
Differentiation is another core priority for Diageo and Fischer highlighted the strength of limited editions including Johnnie Walker Blue Label Christmas and New Origins series. “We will continue to differentiate for the channel because we know it is a core driver for our customers and obviously for the travellers.”
He also spotlighted the Diageo Whisky Academy engagement and education platform to drive involvement at a category level.
Discussing the “extraordinary” rapid development of the offshore duty free channel in Hainan, Fischer said: “Clearly it is a core part of the Chinese government’s strategy to give that duty free experience to their consumers even when they can’t travel. We see this being with us for a long time and we have invested in the various concessionaires in the market.”
Diageo has seven bespoke stores on the island and Fischer predicted further growth. He underlined the two-fold roles of the store in offering significant commercial opportunities and enhancing education and engagement.
He also emphasised the underdevelopment of the Scotch category in China, with less than a 3% penetration, and the related opportunity for growth. Emerging middle class Chinese consumers will continue to drive sales and consumption around the world, he said, noting also the positive effects of recovering markets in the Americas and Europe.
Touching on the vast baijiu spirits category, Fischer emphasised Diageo’s “privileged position” as one of the few international spirits companies which is participating in the category with its Shui Jing Fang brand.
He also highlighted the recent opening of the Johnnie Walker Princes St Experience Centre (detailed in a fascinating Experience Arena sneak peek) in Edinburgh, Scotland. The centre is part of Diageo’s £185 million investment into its distillery visitor centres with a focus on Scotch whisky tourism.
“It is exciting to see us, through a very challenging period of time, continuing in invest in such an iconic landmark building to enhance the category, the industry and, of course, Johnnie Walker.
“We will continue to innovate with this brand because we know that differentiation works extremely well.” Fischer noted a new promotional strategy, showcasing a more vibrant and contemporary offer, which aims to engage younger consumers.
“I think that is going to be quite a refreshing view of Johnnie Walker as travellers come back into airports. Johnnie Walker will play a pivotal role and ‘keep walking’ will fit perfectly with that emerging channel.”
Fischer also touched on Diageo’s key 2030 goals centred on sustainability, positive drinking, inclusion and diversity.
The group’s mission is to reach 1 billion people globally with messages of positive drinking to try to reduce any harm that alcohol can create, with its brands as its spokespersons.
As reported, Diageo revealed its newest no and low innovation, Tanqueray 0.0%, in an Experience Arena Session on Monday, the opening day of the Virtual Travel Retail Expo. Tanqueray 0.0%, launching in global travel retail this month, is part of Diageo’s positive drinking strategy called ‘Spirit of Progress Society 2030’.
Diageo aims to have gender neutrality by 2030, and to enhance ethnic diversity with 45% of its leadership positions coming from ethnically diverse backgrounds.
Its mission to become carbon neutral and to minimise the impact of its environmental imprint will, according to Fischer, be evident in travel retail.
“Giving back to the community and making sure we are a wonderful corporate citizen is critical to us over the next decade,” he concluded.
