BlogSpirits & Wines

Introduction by: Peter Marshall

While Diageo’s broader 2024 performance could hardly be described as stellar, in travel retail, the mood is buoyant. Global Travel Managing Director Andrew Cowan gives Kristiane Sherry his 2024 assessment of Tequila, gin and the enduring behemoth brand that is Johnnie Walker.


There are worse places to be during the TFWA World Exhibition. Stretched out at a Cannes beachside bar, Paloma in hand, while the sun starts to set, it’s exactly what all our friends and partners think we do during the tax-free show. But this is work (honest). Across from me sits Andrew Cowan, Diageo Global Travel’s Managing Director. This is the Diageo stand. And it’s stunning.

It speaks to a philosophy at the heart of the supplier’s channel operations. “In travel retail, we compete against Chanel and the most sophisticated cosmetics brands,” Clemmie Raynsford, Director of Comms tells me as she sits down next to us. “Our activations and the things we do have to really stand out when we’re talking to people.”

The presence in Cannes certainly stands out. You can’t not be impressed. After the interview, Raynsford shows me the corridor of branded rooms that have been meticulously designed and constructed to bring each one to life. It’s like Diageo has magicked a whole universe of its own between the Croisette and the sea.

“Our job is to shape categories,” Cowan tells me. He points to Don Julio 1942, which he claims represented 88% of the entire Tequila growth in the channel last year. “It’s not about being on the back foot and thinking, ‘what do we do now?’. It’s about constant curiosity around how you serve really interesting, exciting drinks to consumers.”

An interesting example here is the serve-forward approach he’s taking to gin. IWSR commentary released in June 2024 showed that the premium-plus segment is declining in its core UK and Spanish markets. But the US, France, Japan and India were all still expected to perform relatively well. “The category is, let’s say, flat, or not growing quite as fast as it was,” Cowan states. But the traditional London dry style seems to offer opportunities. The focus is on the likes of glassware and innovative garnishes. And the touchdown of Aviation Gin in travel retail looks set to bolster things, too.

“It’s not restricted to global travel,” he stresses. “But because of the brand name, the brand world, we’ve been able to work with [Ryan Reynolds] to do a travel retail exclusive.”

Expedition Strength was rolled out over the summer but formally introduced in Cannes. The 46.5% ABV variant (up from the standard 42% ABV) was described as “the liquid equivalent of a neck pillow” by Reynolds. It’s not clear if the liquid differs in any other way. But Cowan is adamant that it has standout quality.

“We feel as though Aviation is disruptive enough to provoke further reappraisal of the gin category,” he states. “It keeps it interesting and vibrant and noisy, rather than just accept [gin’s] slowed down a bit.” He’s betting that the allure of the serve will endure. “At the end of the day, the occasionality around gin as an early evening drink remains thriving, really robust.”

Another Cannes focus that points to resilience in an otherwise challenged market is Johnnie Walker Black Ruby. Cowan describes it as an ‘iteration’ of Black Label, a blended Scotch that has deservedly become an icon. For this new release, there’s a fruity sweetness that comes from the use of wine casks – a profile that he says is a “third dimension”. “When it’s sweet, it’s mixable,” he stresses, going back to that serve focus again. He also claims that the launch has recruited more women to the brand. “The product is just so democratic.”

It points to a clear strategy from Johnnie Walker to broaden its appeal – just  look at the appointment of Priyanka Chopra Jonas in late October 2024 as an ambassador for the Johnnie Walker Blue Label Ice Chalet limited edition blend.

Perhaps the biggest win of the year for Cowan has been the roll-out of Don Julio in travel retail. In summer 2023 he made a big splash with the brand at key locations around the world. The momentum has only built. It’s interesting given that, at the time, travel retailers weren’t necessarily backing the category – despite its undeniable growth in key domestic markets and cocktail capitals. What was the secret?

“We treated it [Don Julio] like it was as big as Johnnie Walker in the way we funded it,” Cowan details. “We didn’t look at a return on investment. We invested ahead.” What that resulted in, in terms of the calendar year, was growth 50% ahead of the category average based on IWSR data. “If you take our fiscal year, we’re a lot more than that.”

The momentum continued into this year. There were pop-ups at global airports in partnership with Ibiza superclub Pacha, and even a travel retail exclusive. “I see our job as teaching the world to drink Tequila,” he sums it all up. “Tequila for Diageo is bigger than vodka but it’s still regional,” he says. “Global travel is a massive opportunity to internationalise. Just imagine how big it could be.”

Cowan is determined. In his vision to propel the category – and obviously his own sales – he spent 25% of his A&B budget on Tequila alone last year. “You take a disproportionate share of the growth,” he smiles. But that philosophy is rolling out category-wide, too. “We’re really trying to lean into not just consumer trends, but also back into the industry, to make sure that travel retail is an exciting, newsworthy place.” Does Diageo have the clout for that? Cowan certainly believes it does.

 

Peter Marshall

Founder: trunblocked.com/Marshall Arts
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