Premiumization, experiences, activations lead Diageo Global Travel’s brand-building growth strategy
The Diageo Global Travel team remains excited about the potential of the travel retail space. This sector offers unique opportunities for brand-building, innovative product development and presenting travelers with an enriched experience of Diageo's premium products distinct from what they find in domestic markets.
Recently, GTR Magazine’s Alison Farrington caught up with Nick Cook, Commercial Director, Americas and Europe, and Faith Holland, Head of Customer Marketing, to discuss Diageo Global Travel’s premium launches and how they contribute to Diageo’s overarching plans to grow its premium spirits business.
Showcasing the group’s category strategy, the Diageo Global Travel team highlighted its four growth pillars: Explore and Discover, Gifting, Making it Special and Balanced Choices.
Pre-pandemic, Diageo set a bold ambition to double the size of its alcohol category share in travel retail over the coming years. “This was a significant increase – we see it as a US$8 billion opportunity – and we wanted to come at it from a whole category point of view,” says Nick Cook. “We’re leaders in the category and we want that responsibility; we’re going to make changes to help growth.”
Of that figure, gifting makes up around US$2.5 billion, explains Cook. “We know we have to make the product special, which will increase those occasions to buy. Then we’ve got ‘Explore and Discover,’ which is where our ‘What’s Your Whisky’ tool comes in. ‘Balanced Choices’ is where a lot of our 0.0% fits in.”
Cook explains that Balanced Choices is intended to cross categories, but the strategy has taken time. “When we first returned to Cannes in 2021, some people questioned why we had other brands such as Hendricks on our stand. The ‘Balanced Choices’ framework is an education piece to promote non-alcohol via an ‘Enjoy’ retail platform. We're giving this to retailers with the message: use this for all your non-alcohol brands, not just the Diageo brands. Put them all together in a really engaging space.”
The growth of cruise retail for Diageo Global Travel speaks generally to how the travel retail space offers a platform for brand-building, says Holland. “Whether it is experiences you're creating for a group of 500 passengers on a cruise ship or a pop-up and ads in an airport, it's that brand-building opportunity,” she says, explaining that selling is not the only goal. Instead, it is building the brand as a whole, so consumers have that memory when they're back in the domestic markets.
Holland says this plays into some of Diageo’s latest activations for Johnny Walker Blue Label, with the “City Bags” and “What's your Whisky” promotions. “City Bags is a great example where we put that name of the city on the bag for the Johnny Walker purchase. So not only can you buy the bottle, but you have that memory of where you've traveled from,” she says. Personalization is a significant trend, as travelers seek to carry a reminder of their destinations and experiences.
The significance of gifting in travel retail is well known, and Diageo has captured a unique opportunity to enhance the consumer experience. “By personalizing a purchase, such as a luggage tag with their bottle, customers receive a more meaningful experience,” says Holland. This personal touch is made possible by the dwell time travel retail affords, allowing deeper engagement with the brand and its story. “It's an opportunity to really engage with people; to talk a little bit more about the stories of the brand and leave them with something that creates a memory and an elevated experience,” she says.
Riding the tequila wave: Don Julio 1942
Diageo Global Travel chose London Heathrow to launch its latest premium brand, Don Julio 1942, with a major luxury bar pop-up. According to Holland, tequila is the company’s biggest category earmarked for growth because of the nature of the product. “We like to say it's got the craftsmanship of whisky, the status of Cognac, the versatility of vodka and the occasion of Champagne,” she says. “There aren't other categories that have those four attributes quite so clearly defined, and it's a testament to how the tequila trend has moved so quickly.”
“In July, Don Julio1942 was the third-biggest selling SKU in all of T5, right across all of the categories,” says Cook.
According to feedback the luxury elements and brand storytelling of the 1942 pop up contributed to conversion rates. “The Champagne style bar, ice buckets, the shape of the bottle meant visitors wanted to sit down, they wanted to discover the brand and learn about the Blue Weber Agave process,” says Cook.
Tequila is finally resonating with a global audience: the biggest nationality to buy from the Don Julio 1942 pop-up in Heathrow was India, according to Cook, but it is also selling well across Europe, America and Asia.
“We've got certain sites where we're investing, because we believe the demographic is better suited,” he says. “But from a brand-building perspective, you get that halo effect and it’s why we now have a partnership with British Airways for the signature serve in the first-class lounge, so it ties it all together at London Heathrow.”
Extra special: Johnnie Walker Xordinaire
Johnnie Walker Xordinaire launched in September with large promotional budgets and much fanfare, from the New York Times cover ad to the activations roll out that kicked off in Paris. And Diageo Global Travel sees big changes ahead for Johnny Walker Blue Label, says Holland.
“The brand started its life 30 years ago as a travel retail exclusive. So, we thought it was about time to launch the next version, a premium offer, which is Johnny Walker Blue Label, then aged in XO French Cognac casks. It's got all the depth of flavor of Blue Label, but the finish in the XO French Cognac cask gives it a sweetness and smoothness that is very appealing, especially to recruit new whisky consumers,” she says.
Holland says the launch of Xordinaire has been geared around service. Diageo worked with a French chocolatier to develop a chocolate that perfectly pairs with the whisky. “So rather than just giving the whisky to try, it's a whole tasting experience to really immerse the customer in how it tastes,” says Holland.
The team has developed a great deal of digital content to bring to life the partnership of whisky and the Cognac casks; the content is featured in the company’s immersive lift experience, part of the pop-up activation that will move from Singapore to Heathrow to Dubai. “It’s about delivering a premium experience,” says Holland. “It's a great example of advertising outside of the travel retail space.”
The investment behind Xordinaire is significant. “We've got very strong growth ambitions this year, but this launch would be about 30% of that growth. Between that and tequila, we're covering about three-quarters of what we're trying to do in one year,” he says.
Concludes Holland: “Our innovation pipeline is thinking about how we premiumize, how we encourage people to drink better and constantly educate or create special moments in the travel retail space.”