Blends vs Single Malts
In both the blended and single malt whisky categories, trends are pointing at a preference for premium and even super-premium offerings. Nushi Wijewardena reports
COLOMBO Banadaranaike Airport is an unlikely place to see single malt whisky flying off the shelves. As the gateway to what is traditionally a blended whisky-drinking country, the expectation would be to see the same demands mirrored in airport shops. Yet Sri Lanka’s main airport, which shows single malt whisky sales growing at 75% a year, is an exemplifier that travelretail sales do not follow domestic trends.
And so it goes in many other countries too. Despite Taiwan’s domestic thirst for blended whiskies, in the country’s duty-free market, the malt category has grown threefold in the space of five years. Research
recently carried out by the Alpha Group in India has shown that 50% of all shoppers travelling through Indira Gandhi International Airport (New Delhi) are trading up to more premium products among which, the Group said, was malt whisky. As a result, the category now accounts for over 20% of liquor sales conducted by the airport, which sits in a blended whisky-drinking nation.
Part of this is due to savings. Outside the EU, many consumers still leave their most expensive purchases for when they travel, and with single malts commanding a higher spend than blends, they are
placed on the luxury pedestal. Indian and Sri Lankan travel-retail single malt sales are ballooning not least because as people become more mobile, they are realising that they can avoid the massive import duties they incur at home on liquor by shopping in dutyfree. This gives travel-retail a natural upper-hand when it comes to single malt sales, a fact to which the figures testify. The International Wine & Spirit
Record (IWSR) says that in travel-retail, 50% of the Scotch whisky market is in the premium and superpremium sectors of the market, typically occupied by single malts. In domestic channels, this number drops to between 10 and 20%.
However, according to many whisky producers, saving is only a small part of the explanation for this. “Many consumers take the added value proposition of travel-retail for granted but this, as a conscious purchase motivation, typically scores behind such factors as familiarity and quality association. Price saving versus domestic should not be overlooked but there are other factors which I believe are more important to the consumer,” says Keith Bonnington, travel- retail manager for the Edrington Group. Chivas Brothers’ Robin Johnston agrees. “People still see airport purchases as a treat, so when they buy in travel-retail they make it a good one,” says Robin Johnston of Chivas Brothers. “The travel-retail channel is naturally luxurious. The connotations are of indulgence and lavishness. Both frequent travellers as well as those who only travel once a year are influenced by this when they trade up in travel-retail.”
Single malt suppliers take advantage of this fact, particularly when it comes to their new launches.
When The Glenlivet first came out with Nádurra – a small-batch, cask-strength non-chill filtered expression – it was launched as a travel-retail exclusive. “Travel-retail was the perfect channel to launch it into. All the luxury cues of the brand and the exclu-sivity of Nádurra were in the surrroundings in which
it would be sold,” Johnston explained.
On the other hand, blended malts treat the travel- retail channel in the same way. In July this year The Edrington Group launched The Snow Grouse, the first whisky created to be served chilled, and for its first six months of existence it will be exclusively distributed in travel-retail channels. “Travel-retail is a great platform for educating consumers and getting them excited about new products,” Bonnington said.
Bonnington has touched on one of the major factors that set travel-retail apart from domestic channels: its ability to connect with its consumers. With a captive audience like no other channel enjoys, travel-retail has the ability to introduce and educate – and perhaps even convert. “It’s a real opportunity to get to people who don’t know what they want, be they generally blended whisky drinkers or single malt drinkers,” Johnston says. “The Glenlivet displays, for example, were invaluable for convincing consumers to trade up to a more expensive single malt. The touch-screens; the video of the master distiller’s tutored tasting: all these told the story of the Glenlivet to people who did not know it before.”
This is a sentiment The Edrington Group agrees with. “As far as I’m concerned, it is one of the best retail environments to talk to consumers about what makes Scotch whisky and the brands within the category special and different. You cannot possibly command the same degree of engagement in a domestic supermarket or even a city centre bar. Consumers in travel-retail may not necessarily expect to be entertained or enlightened but the fact that they typically have some time to dwell and explore makes them very amenable to brand communication,” says Bonnington.
Staff also encourages sales like they fail to in domestic channels. “I have been impressed over the past two or three years with the commitment from some of the big retailers to invest in proper specialist
people and training and, by and large, the standard of personnel is very high. Of course, as brand owners, we all want to see our brands represented in every conversation the trained specialist has with the consumer but the first priority must be understanding the category, the processes and the regionality
and then moving on from there into why, for example, The Macallan stands out against other Speyside
malts,” Bonnington continues.
But when the competition between the blends and the malts to get the consumer’s attention subsides,
what is left is a channel in which brands still lead the way. Single malts might shout their names
from the rooftops of every travel-retail outlet, but if a consumer is dedicated to their favourite blend, it
will eventually fall on deaf ears. Similarly single malt drinkers who make a bee-line to their favourite product will not even notice the wide array of blends that are waiting to strike his fancy. The battle between the blends and the malts must eventually give way to the battle of the brands.
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