Having recently amalgamated its European and Middle East divisions into one streamlined business entity, Edrington Global Travel Retail is scaling new heights to align its business and brand equity.

In an exclusive interview with TRBusiness, Managing Director Igor Boyadjian explains how the firm is poised to take advantage of the new positioning. 

Appointed in January, Singapore-based Boyadjian co-founded and co-owned Cyprus-based distribution company Fix Wines and Spirits, which was wholly acquired by Edrington last year. Now, he is playing a pivotal role in driving forward Edrington GTR’s growth agenda. He explains that positive volumes and value sales in Q1 accompany a plan to continue nurturing The Macallan Boutique concept with expansion to other potential destinations in the future.

Firstly, how are you settling into your new role role?

I’ve been very close to Edrington for 10 years, so it’s like re-joining a family and the big attraction for me was to join a company with great values and people. To have a new senior challenge at a corporate level following 10 years as an entrepreneur is quite attractive. Travel retail is an industry I have always been in, so it makes it easy to adapt quickly and settle into the role. If you add that I know all the team working with me, it makes it even easier to handle.

There’s been a great deal of activity at the company of late, not least the formation of the EMEA travel retail division. What’s your vision for Edrington GTR moving forward?

If you step back and look at travel retail within Edrington, it’s a fairly young organisation [established in 2014 – Ed]. It started on the back of the old Maxxium Travel Retail split between Beam and Edrington when we had a European travel retail division, Asia travel retail division and the Middle East and Americas as joint ventures.

As we did the acquisition of the JV in the Middle East [as mentioned above, Edrington fully acquired the stake of its Edrington Fix Middle East business in April last year – Ed] it was quite relevant for me. We facilitated the integration – people, systems and ways of working – into the European division to have a better, balanced organisation within the regions in terms of size and capabilities. It was also important to streamline the reporting lines.

Do you feel there is more room to develop customer synergies with the new setup?

If you look at the customer side, there have been a lot of changes and consolidation. A lot of our customers and partners have businesses all around the world, so working with small business entities was not helping global discussions to capture the concentration of businesses in the industry.

It’s an easy way to have more consistency and alignment when dealing with key customers as it is becoming more important to have these global discussions with the big players. 

How will the new structure provide retail operators with more value and
help increase Edrington GTR’s exposure on a brand level?

The brand journey that we’re on is very clear. We’ve got The Macallan – a fantastic jewel in our portfolio with significant growth and massive ambition. That is going to continue. I’m not here to change course, and I think this journey has been clearly established by our business.

The Macallan is our number one priority; we want to perfect the brand at all levels from the consumer to the branding and the relationship with its business units. What is going to change is how we can develop some of the retail experience around the brand, off the back of the boutique or shop-in-shop experiences.

We need strong retail partnerships to bring it to life, but each time we are given enough space in the right retail environment, the results have been outstanding and it has a massive halo effect on the rest of the range and showcases our craftsmanship at the top end. I think this journey will be a big priority, focusing on how we can perfect the retail experience and consumer engagement.

How did the GTR business perform last year and in Q1 2017?

It was tough in 2016, but we’re growing quite nicely in volumes and value this year. This is not as fast as in the past. We’ve experienced the slowdown in passenger spend such as with the Chinese and Russians passengers, but it has proved quite resilient, and we still managed to deliver healthy retail sales growth [high single-digit – Ed] versus last year. We do have issues on some of the specific lines that we might try to address.

The Macallan has been the star of our whole portfolio and very resilient, but we don’t want to rest on our laurels, so we will continue to improve the perceived value and consistency of our range with consumers. If I look at the year-end result, we are very satisfied. On the blends, it’s been more challenging, with heavy competition and price pressure, so more of a flat performance. If you look at declining Chinese or Russian passengers, the currency swings and the competition within the category, it wasn’t like what it was five or seven years ago. There are a lot more products on the shelf, but despite this we managed to grow The Macallan brand.

For a lot of retailers last year, they had more passengers, but they were spending less. For the retailers to have a brand like The Macallan, it’s also a way to increase the average ticket, so it’s been a win-win in that sense. What we bring is value. Retailers have other brands to hit the volumes, but we’re here to make sure that the value and the average spend is healthy, and that’s a role we can play for our partners. We’re not crisis proof, but in times of crisis and declining spend, we are playing a big role in some locations.

Our entry level Macallan is performing well too. It’s more in between where the growth hasn’t been that fast, probably between $100-$400. As we step into a new fiscal year, we’ll be looking at our pricing strategy because there has been a lot of currency movements and pressure from our competitors to drive pricing down. The entry level for single malts is now extremely low. We don’t want to play that game, but we cannot ignore it completely.

What will be interesting now is to see if the positive signs we’ve seen in the last few months will hold. We’ve seen increasing passenger traffic, the Chinese and Indians seem to travel more, so is that going to continue? We don’t know. Long term, I’m more positive, but in the short term, we will see. What I see is that the currency swings have come down again, so that will allow us more harmony around the world and all key airport retailers are posting growth. We’re not back to the golden days of huge growth, but there are positive signs there.

Are you confident you can continue to build on positives such as the levelling out seen in some of the currencies?

I’m so confident internally in what we’re doing to address these changes and to make sure the perceived value by our customers remains strong. It’s about not being complacent; we’re very determined to remain in control to drive the brand equity and value.