Diageo Global Travel (GT) has set out four key priorities for its travel retail business, including Johnnie Walker, single malts, Tequila, and its “premium core” business representing products around US$50 and below.
Speaking at Heathrow Airport at the launch of a Don Julio 1942 pop-up, Diageo GT Managing Director Andrew Cowan outlined the four areas as part of his strategy.
“We feel as though we play too narrow,” he said of the premium core business. He named Captain Morgan, Smirnoff, Cîroc, Ketel One and Gordon’s Gin as priorities in this area.
“We feel as though we could invest bigger to be bigger on that portfolio.”
Last year, Diageo brought a Tanqueray 0.0% promotion to Heathrow T5, but it has been some time since the other named premium core brands have seen significant GTR activity.
Cowan then named Johnnie Walker as the next priority. “We realise it’s half our business,” he continued. “We’re investing more at the higher end of Johnnie Walker than we have historically.”
“Whereas you would have historically seen a Black Label [activation] – it’s just amazing – it’s so well-established and at such scale. Consumers are looking within the Johnnie Walker portfolio to on occasion, treat themselves.”
He named the single malt portfolio as the third area of focus, with The Singleton, Talisker and Mortlach. “They are our priority brands and we will invest heavily there.”
Finally the highlighted the role travel retail has to play in the internationalisation of the Tequila category.
“Tequila can be a material part of our revenue portion,” he stated. “Debra [Crew, Diageo CEO] talks passionately about global travel being the vehicle with which you can internationalise Tequila.”
Cowan stated that Diageo didn’t have a presence in the category ten years ago. “Now it is as important to us as our vodka portfolio which we’ve had for many years.”
Earlier this week TRBusiness reported that Diageo global net sales grew 10.7% to £17.1 billion for the 12 months to 30 June, with Cowan stating that global travel retail revenues tracked “materially ahead” of local market growth.