Pernod Ricard GTR (PR GTR) is on track to achieve its goal to reach a net zero carbon footprint by 2050, backed by a strong pipeline of innovative new launches and activations that utilise top technologies, and a passion for driving consumer engagement.
The strategy is paying off. Pernod Ricard’s latest sales report, released on 19 October, demonstrates a dynamic start to the year with sales for the first quarter of FY23 totalling €3,308 million (approximately US$3,270 million), with an organic growth of +11% and ‘travel retail continuing to rebound’.
Liya Zhang, VP Marketing attributes the division’s resilience in part to its continued collaborations with stakeholders, which she says is key to maintaining its position as a category leader, and increasing its market share.
PR GTR has been reflecting on its position in the industry to help drive “important agendas forward in the channel”, from advancements in customer engagement to sustainability.
“I think that, following covid, sustainability, has never been so important for travellers – and also for us and the airports,” said Zhang, when TRBusiness sat down for an interview with PR GTR during the TFWA World Exhibition & Conference in Cannes.
“We know through our consumer sentiment tracker that 66% of shoppers consider sustainability during their purchase or engagement in store,” added Daniel Worboys, Head of Retail Design.
“It’s a heightened conscious decision – potentially more so during travel.
“So as a group we’ve looked at every touch point throughout the business to drive our sustainability performance.”
In line with the Good Times from a Good Place company roadmap that was created in 2019, this comes to life in a variety of ways, led by a focus on circular making in retail design.
“Retail design is our biggest contributor in terms of CO2 emissions,” said Worboys.
“Last year, we launched the Life Cycle Analysis (LCA) Tool and this year we have some super strong first year results – a 44% carbon reduction across our GTR retail design projects (280 in total).
“We’re also focusing on circular making in terms of our products,” he adds.
Embracing the digital transformation
Digital is integrated into “pretty much all” of PR GTR’s retail spaces, according to Worboys.
The division’s second Hainan boutique for Martell (and largest in duty free) opened on Hainan island in June at Haikou’s downtown Mova Mall, featuring an AI robot bartender, among other innovations.
“There are a lot of emerging technologies,” said Worboys. “A key area is the metaverse, which is something we are very new to.
“It’s not something we are currently focusing on and delivering upon, but we are monitoring it closely to see how we may be able to move into that area.”
Today, the plan is to refine the technologies that are currently being utilised in store.
“Obviously, the benefit of having digital experiences in store is that you can source and track data,” said Worboys.
“We use that to refine and develop more engaging experiences. But the platforms themselves are very much based in AI and VR.”
Zhang agrees that technology “plays a very important part in the ability to connect all the touch points and provide a seamless journey” for consumers, with quality content crucial for making that meaningful connection.
She takes Royal Salute as a case in point, with the launch of The Kingdom Club, the new virtual experience exclusively for duty free shoppers.
“This experience can be easily planted in retailer’s platforms,” she said.
“We are working with Lotte in Korea and in Singapore Changi. How it is utilised depends on the environment.
“In Korea, for example, it plays an important role for travellers who want to explore the world of the brand, as they can read the interesting stories behind it.
“In Changi, we link to other touch points, such social media. For instance, by working with a fashion blogger to connect to the domestic synergy.
“Ultimately, our goal is to connect all those touch points that could be relevant to those travellers [in that location] and to invite them into our world.”
The proof is in the pudding.
“The data is showing this approach is very powerful,” she said. “Today, 53% of travellers notice the communication touch points before they arrive at the airport – in 2019 that was 18%.”
The bottle is king
In terms of what makes the alcohol category stand out, Zhang points to the bottle as being a unique selling point.
“We do sampling, but outside of this we cannot open the bottle just to experience it, like you can with a perfume,” she said.
“So the question is: as consumers want to explore the different tastes and flavours, how can we facilitate that exploration? I don’t have the full answer yet. I still believe that ‘phigital’ could be a solution.”
An example of this is the new global campaign for Jameson, called ‘Arrive Like a Local’, which was launched in Cannes.
The campaign compiles recommendations to help travellers find all they need to eat, drink, explore, mix and live like a local on their adventurea.
“We are very proud of the concept. It’s very simple but travel centric,” said Zhang.
The roadmap to a more sustainable future
PR GTR’s goal is to become net zero by 2050 and to achieve a 50% reduction of its carbon footprint by 2023.
“Regarding circular making, which is our leading pillar specific to GTR, the first tool (the LCA Tool) has achieved a 44% reduction so we are quite advanced in our roadmap there,” said Worboys.
“We will deliver the 50% within this next fiscal year.”
The second LCA tool in the suite is the Gift With Purchase (GWP) tool, which resulted in a 34% reduction in the carbon footprint of the company’s new trolley bag in its first application, mainly due to a clever material swap.
“We have a potential third LCA to be released later this year – it’s a wider group LCA,” he revealed.
Asked what the sustainability achievements mean to the duo personally and the response is easy to relate to.
“For me personally, I have always been passionate about sustainability, which is a challenge as retail projects are production based,” said Worboys.
“So being able to lead the channel with this LCA Tool and to really learn [about it] is something that the team is really passionate about.
“We have delivered 280 projects and saved 198 tonnes of CO2 through retail design projects so it’s something we can take pride in when we know we are making a difference.”
“The whole industry is ready to make the transformation,” summarised Zhang.
“The biggest opportunity is traveller engagement. We are able to create something meaningful and powerful for consumers so I believe travel retail is not just a channel with huge commercial value, but also extremely valuable for brand building.”