Estonian spirits producer Liviko has cited increased distribution and visibility as its main ambition for the travel retail and duty free business.

The company, which boasts a state-of-the-art distillery comprising an open factory and interactive museum has made steady recent progress in the channel with key listings of its Crafter’s Gins (London Dry and Aromatic Flower) and Vana Tallinn liqueurs in Europe and Asia.

The latter comprises 27 skus and is present in around 40 countries (duty free and duty paid).

TRAVEL RETAIL AWARDS FINALIST

Liviko, which was established in 1898 and is Estonia’s oldest and biggest alcohol producer, was a finalist in the Best Spirits Product category (Crafter’s London Dry Gin) at this year’s consumer-voted Travel Retail Awards in Singapore.

The awards logo, which travellers can identify at airports and on travel retail products worldwide, has also been used on end-of-shelf branding for Crafter’s at Sydney Airport.

Speaking to TRBusiness, which was the sole trade media in attendance during a recent tour of the distillery, Jörgen Herman, Export Director said: “We have some very good accounts with companies like Gebr. Heinemann, which last April listed Crafter’s Gin in Western European Airports such as Frankfurt, Berlin, Vienna and Copenhagen.

“For a young brand like Crafter’s, which was launched in 2015, it is a massive compliment to be listed by a leading duty free operator such as Heinemann, which has thousands of different gins to choose from.”

On the company’s overall DF&TR business, Herman added: “It is all going well, but we are still trying to build distribution, increase visibility and make Crafter’s a global brand.”

A member of the TFWA and Nordic Travel Retail Group, the company, which reported net revenue of €125m ($140m)) in 2018 exhibited for the fourth time at this year’s TFWA Asia Pacific event in Singapore.

In addition to displaying its Crafter’s Gin products (London Dry Gin and Aromatic Flavour Gin), Liviko also unveiled the Vana Tallinn Coffee Fusion, the company’s first travel retail exclusive.

“Crafter’s has reached some parts of Asia Pacific, but as previously mentioned is a relatively young brand. Listings have been secured in Sydney, Jakarta, Kuala Lumpur and Jakarta Soekarno-Hatta International Airports and we are also present in some Asian domestic markets,” emphasised Herman.

He added: “TFWA Singapore is an important event where we have to be present in duty free and domestic capacities. This is because there are some dealers and importers in the region which attend each year.”

Travel retail exclusives can often tip the balance for retailers which may be unsure about listing certain products. This, along with the burgeoning trend for coffee in the region was certainly considered before launching Vana Tallinn Coffee Fusion.

“Duty Free and travel retail operators always love or prefer to have travel retail exclusive products. We chose coffee because it is huge in our region. Fins are the highest coffee consumers per capita and Swedes, Norwegians and Russians are all huge coffee consumers.

Vana Tallinn is normally consumed with coffee so we came up with this idea,” acknowledged Herman.

Vana Tallinn Coffee Fusion may only have been launched around two months ago, but this has not stopped the likes of Viking Line, Baltona, all the ferry operators on the Baltic Sea and Russian border shops from immediately listing the product.

“We will monitor the success and development of this travel retail exclusive and definitely consider similar products perhaps with Crafters,” indicated Herman.

ROUTE TO MARKET

Duty free and travel is clearly an important part of the business and often a route to market for companies such as Liviko.

Herman explained: “With Heinemann, for example, we have opened key markets such as Malaysia which we didn’t have before. Since beginning in Kuala Lumpur International Airport (KLIA2), we have also had quite a few interested parties wanting to introduce Crafter’s to the Malaysian domestic market.”

Another example is India, where Liviko launched its Vana Tallinn, Crafters and Viru Valge vodka products with Delhi Duty Free on 1 May. “After that, we started receiving inquiries about importing the products and making them available elsewhere in India.”

In terms of pricing, the company has it own benchmarks. “For Crafter’s, our benchmark is to be somewhere between Bombay Sapphire and Hendrick’s when it comes to recommended retail price. Hendrick’s is the market leader in the premium gin sector, so we want to be priced below Hendrick’s in most markets.”

In order to accelerate its DF&TR business Liviko is hoping to implement more point of sale activations. Herman said: “We have different activities in quite a few locations and are looking at various opportunities case by case.”

One point of sale initiative, which the company hopes will have a strong impact is the introduction of aroma sampling for Crafter’s products.

“Spirit tastings are not permitted in all locations, so instead of classic gin tasting we will use perfume. Aroma sampling is very common in the beauty segment and we look forward to trying this at Sydney Airport among other places.”

In addition to sampling and point of sale activity, staff training is extremely important. “We do a lot of training on our side. Our export manager, for example, travelled across Asia doing trainings for staff at all airport shops just before the Singapore show.

“We also do the same in Scandinavia and Eastern Europe and invite customers to visit us in Estonia,” emphasised Herman.

FUTURE OUTLOOK

There is clearly plenty to look forward to for Liviko, which is keen to realise the potential of its Crafter’s and Vana Tallinn products in DF&TR. He explained: “The world is so different. When we talk about Vana Tallinn and travel retail we are very big in Eastern Europe and Scandinavia.

“When talking about Crafter’s it is clear Europe and Asia have huge potential.”

Speaking of potential, Anna-Kai Tõrs, Export Marketing Manager says Crafter’s ability to stand out from the crowd in DF&TR bodes well for the future. “Passengers passing through Frankfurt Airport, for example are used to seeing all the familiar gins such as Bombay Sapphire and Tanqueray.

“Now, they will also see a blue bottle on the gin shelf which is totally different from the classic transparent bottles.”

She continued: “At the airport, passengers do not have much time and normally have a short period to make a choice. Quite often, they choose something familiar or appealing to them.”

Trying something new is seemingly an option, which is why Liviko has so many repeat customers in travel retail and duty free. Tõrs concluded: “At first, travellers were attracted to the design of the Crafter’s bottle. Now, they really like the content as well which is why they tend to purchase again when they see Crafter’s at another airport.”