Travelling the new world
Traverse any well-provisioned duty free store in a major airport and the wine selection should include premium wines from around the world. Not so many years ago, you could not find this presence of labels from winemakers in the US, Canada, Argentina, Chile, Australia, New Zealand and South Africa (among others, of course).
Now that these ‘New World’ producers are familiar to travelling consumers, the suppliers are deepening their brand message and appealing to the fine judgement of the connoisseur. After all, it is the quality of the wine that is the ultimate arbiter of success, and the main winemakers in duty free markets have easily moved onto the top shelves.
Pulenta Estate Wine markets its wines internationally and to visiting tourists from its base in Mendoza, Argentina. “Our philosophy is to produce limited series of high quality wines,” comments the winery’s Eduardo Pulenta, Jr. “This lets us compete in the most high premium wine markets. Argentina allows us to have a good relation between price and quality. So, our aim is to let people taste our wines and then let them decide.”
Duty free distribution is concentrated on outlets in Argentina, with Brasif in Brazil, and onboard Silverseas Cruisers. “We are making new contacts to sell at Uruguayan duty free shops, and our UK importer has shops at Heathrow airport,” says Pulenta. He adds: “Our Pulenta Estate Sauvignon Blanc 2006 got a double gold medal at the International Hyatt Wine Awards. This varietal is in strong demand.”
Other popular wines in duty free channels are the 2004 vintages of Pulenta Estate Malbec, Pulenta
Estate Cabernet Sauvignon, Pulenta Estate Merlot, Pulenta Estate Malbec/Cabernet, and Pulenta
Gran Corte.
Across the Andes in Chile, it is no surprise that a prominent name in duty free wine production is also dedicated to only premium wines harvested by hand from its own vineyards. Balduzzi Vineyards & Winery obtains all of its production from the D.O. Maule Valley, and exports to more than 20 countries in the Americas, Europe & Asia. “Our wines are easy to find at duty free stores in Central America, the US, China, Korea and other countries,” says export manager America and Asia, Rodrigo Sepulveda.
The most popular wine is the Balduzzi Grand Reserve. “This wine is especially for duty free due to its complexity (blend of four grapes), tasting and label.
“Balduzzi Vineyards & Winery plans to increase sales in this market sector by building an image of handcrafted wine, but made with high technology. This plan is shared by our importers in each country, who are supported by Balduzzi Winery in their activities.”
Higher-end New World wines, such as the well-established Californian wines from Wente
Vineyards, have real relevance in the space- and margin-conscious travel retail context. “They can produce significant margins for the retailer who can justify higher prices because of the limited production and authenticity of the product,” comments Wente Vineyards export director Michael Parr. Focusing on the integrity of the brand and creating value for the customer have been the keys to Wente’s success in the market.
Not that ‘New World’ need imply only ‘boutique’. Foster’s Australia manages its Penfolds wines on a full global scale. Ildi Ireland, brand communications manager (Penfolds and Fortifieds), states that “DF and travel retail is an opportunity to showcase Penfolds Wines as one of the world’s best wine brands, to create an educational experience for consumers and reach them in a way that is not possible in other channels.”
Providing wines and gift packaging that is exclusive to duty free is important, and Foster’s contains these within displays that showcase the brand and provide tools that educate and entertain consumers.
Penfolds is in expansive mode. “Travel retail is a relatively new area of focus for Penfolds, but one that is becoming increasingly important. We will be investigating a variety of opportunities including display, gifting, advertising and promotion, both in travel retail, airline lounges and in-flight,” concludes Ireland.
The mostly smaller-scale wineries of New Zealand generally market to domestic duty free stores and have distributors managing the duty free channel outside of New Zealand. That is also the distribution plan of one of the country’s larger wine producers, Auckland-based Villa Maria Estate. Its most popular varietals in duty free channels are Sauvignon Blanc, Chardonnay, Pinot Noir, and Merlot blends.
Although many New World wines have established a strong position in world markets, competition and volumes from other New World wine producers seem only to intensify. To sustain advantage in this context requires what Villa Maria Estate spokesperson Caroline Rowe calls “dedication to quality at every stage of the grapegrowing and winemaking process, which has led to Villa Maria becoming New Zealand’s most awarded winery.
Growth is coming in what Villa Maria Estate sees as the key varietals — Pinot Noir, Pinot Gris, Sauvignon Blanc and Syrah. In duty free the short-term challenge remains the increased security restrictions on carrying liquid on board airlines. “Retailers can’t sell to travellers going to certain destinations so this has naturally impacted sales of wine,” reports Rowe.
Canada’s Peller Estates Icewine acknowledges the major financial setbacks it and partners have suffered following the challenges of the terrorist threats in August in London that changed duty free/airline policies. In the experienced view of Bill Harvey, director of export: “The fact is our industry is directly and will continue to be affected with world events that we cannot control.”
At least for Peller Estates Icewine the challenge comes after four years of double digit growth. Leveraging off growth in the Canadian domestic market has allowed Peller Estates to leverage its strengths into global markets. “Asia continues to be a key market for us due to consumer awareness and understanding of the quality of our product, and we have also added a new distributor, Cornerstone, in Southeast Asia to strengthen our brand.” The US and Europe are offering new opportunities to expand the brand and presence.
New World winemakers are adapting to the changes in airport regulations and remain committed to travel retail. Peller Estates will be at the IAADFS show this year launching its new Peller Estates Sparkling Ice Cuvee VQA 750ml. Harvey says that Peller will also continue to innovate with its packaging, as demonstrated by its new white Icewine boxes and subtle snow flakes suggestive of the Canadian winter.
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