Behind the rise of ultra-prestige products in Asia’s travel retail market

told Inside Retail. One of the beverage company’s latest initiatives is the launch of a limited-edition bottle of Royal Salute as part of the World of Wines and Spirits campaign at Singapore’s Changi Airport. With only 21 bottles produced worldwide, one unit of the 53-year old blended scotch whisky will be available for SGD$130,000. Zhang has observed an “increasing thirst” for truly unique luxury items, and the Royal Salute campaign is all about creating an “ultra-prestige expression” that is intended to resonate with this cohort of travellers. “[The Art of Wonder collection is] an exciting new platform for Royal Salute that is all about celebrating the transformative power of creativity,” she added. Pernod Ricard has partnered with promising artists in order to engage a cross-section of luxury shopper profiles. Only 21 bottles have been made available globally, with five reserved for the global travel retail channel. Each bottle has been engraved with an intricate feather design, gilded in 24-carat gold leaf inspired by artist Kate McGwire’s exquisite sculptures.  The APAC marketplace As a new generation of whisky drinkers emerges, Zhang is seeing an increased demand for the drink across the APAC marketplace, particularly in China, Korea, Japan and India.  “Specifically, we are seeing increased interest from Indian shoppers in the malt category, and so to help align with this demand, we recently launched a world premiere of The Malt Gallery exhibition with Delhi Duty Free,” she noted. The campaign was all about offering a sensorial experience for shoppers to learn more about the category. Zhang has also noted a premiumisation trend across the whole wine and spirits category in the APAC region. “We are observing the same behaviour in whisky, both in malts and blended Scotch. We’ve observed an acceleration of the ultra prestige segment, especially in the more mature luxury markets of Asia and the Gulf,” she stressed. Consumers are attracted to the craftsmanship and unique tasting profile of single malts, yet high-quality blended Scotch with strong brand equity, such as Royal Salute, Chivas and Ballantine’s, also carry huge appeal. “Travellers are in an exploratory mindset and are seeking newness, innovation and excitement as they return to stores after successive lockdowns and travel restrictions. In this context, the role of the travel retail exclusive is more important than ever,” she added. Strong recovery The company’s internal research points to rare, exclusive and higher-aged products being sought after by high-net-worth individuals either for personal collections or for special occasions. “We are seeing a strong recovery in passenger numbers and business is returning across the globe. We are seeing 76 per cent of international passenger recovery globally, with Americas leading at 93 per cent and North Asia at 30 per cent,” she noted. These figures have been sped up by China opening its border in early January. According to Zhang, although travel has not fully recovered, business growth has outperformed expectations, driven by premiumisation and bigger basket sizes. Nonetheless, she acknowledged that even though travel is picking up globally, inflationary pressures and rising costs are still a factor.  But she believes customers are still making the most of opportunities to buy products during their travels due to the fact that they get a better range of products in travel retail. “The ‘revenge buying’ trend we observed from Europeans and Americans when they started to travel again, has also been replicated in Asia,” she said. According to the company’s sentiment tracker, Chinese consumers have a very strong desire to travel and recommence shopping in duty-free stores. She explained that spending is likely to increase at least in the short-term as they make up for lost time.  “Interestingly, we noticed the number of gifting occasions increased following a return to travel for many nationalities, as many were reunited with family, friends and colleagues,” she observed. She expects the same to be true of Asian nationalities; and this is likely to be more pronounced, especially around the holiday seasons.  One potential challenge is that supply chain issues continue to impact the industry, not only with liquid scarcity in some key categories, such as aged whisky, but also in dry goods, such as glass bottles.