Top Quality, Dealcoholized Wines to Make a Splash in October of 2024

Chicago, Illinois. September 11th, 2024 — A high quality additive to the low ABV and non-alcoholic movement, Kolonne Null is dedicated to crafting dealcoholized wines to the highest degree. Taken on by Wein-Bauer Imports in Chicago as the national importer, five dealcoholized wines will be available in a number of states nationwide—just in time for Sober October! However, don’t be spooked, these are among the best dealcoholized wines to hit the market.

Kolonne Null, established in 2018 in Berlin, Germany, crafts their beverages with traditional wine expertise and a keen sense of innovation. The Kolonne Null wine lab collaborates with family-owned wineries throughout Europe, focusing first on creating quality wines from vineyard to bottle. These products are rooted in the art of quality winemaking. The common goal of Kolonne Null and their winemaking families is to capture the distinctive characteristics of each region, grape variety, and vintage in their wines, weaving a unique story with each bottle.

Yet not all grapes are the same! That’s why Kolonne Null carefully considers and inspects the delicate and subtle differences between them and the wines they select for production. They strictly use traditionally pressed and particularly aromatic vintage wines or cuvées to achieve the highest quality end product. There’s absolutely no compromise when it comes to quality.

Research in their in-house laboratory then lays the foundation for every creation. Kolonne Null is very similar to its alcoholic alternatives: while the alcohol is carefully removed, its replacement of a delicate amount of fine grape must ensure the essential aromas, acids, and vital phenols that make wine so enjoyable are preserved. The must helps orchestrate the symphony between all of the fruits and aromas that leave the wonderful wine flavor completely intact. So, while extracting alcohol they create something new—something that did not exist before—Kolonne Null is making a dealcoholized wine that is natural, low in calories, and extraordinary in taste.

Only the most brilliant compositions are de-alcoholized on a bigger scale and become part of the Kolonne Null collection. The range includes five still wines, featuring Rosé, Riesling, Verdejo, and two red wine cuvées, as well as two sparkling options.

Imported Articles:

  • Kolonne Null Cuvée N°01 Sparkling
  • Kolonne Null Cuvée N°01 Sparkling 375 ml
  • Kolonne Null Cuvée N°02 Rouge
  • Kolonne Null Cuvée N°03 Rouge “Bordeaux Blend”
  • Kolonne Null Riesling
  • Kolonne Null Rosé
  • Kolonne Null Rosé Sparkling
  • Kolonne Null Rosé Sparkling 375 ml
  • Kolonne Null Verdejo

This is beyond grape juice. These are indeed elegant dealcoholized wines.

“We’re excited to partner with such a quality conscious brand. There’s a great opportunity in the market for dealcoholized wines, and Kolonne Null produces some of the best that are out there,” says Christopher Bauer.

About Wein-Bauer

Wein-Bauer Imports is a family owned and operated Wine and Spirits import company based in Chicago, Illinois since August of 1980. The Bauer family has a deep-rooted history in winemaking prior to starting their imports company. Manfred Bauer, founder and owner of WBI, worked in his family’s wine cellar before beginning his journey to bring them to the U.S. market. Manfred was a third-generation winemaker whose vision was to bring not only his family’s wines to an international level but to be an ambassador of European wines.

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Wein-Bauer’s portfolio primarily focuses on importing wines from Austria, Germany, Portugal, Hungary, France, and Argentina on a national level across 47 U.S. states. Their entrepreneurial mindset is still the driving force, as Manfred Bauer and his son Christopher, continue to find innovative, value-driven and family-oriented producers. Today, the company operates with regional offices in the East Coast, West Coast, South and in the Midwest. They also have brokers in key states to ensure that Wein-Bauer can properly service their country wide distribution network.

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Kylie Jenner’s Sprinter Vodka Sodas Make National Push With Southern Glazer’s

September 11, 2024

This spring, celebrity entrepreneur Kylie Jenner entered the spirits-based RTD business with Sprinter, a line of fruit-flavored vodka sodas. The brand got off to a fast start, shipping 140,000 cases in the first month before aligning nationally with Southern Glazer’s Wine & Spirits in August. The company, helmed by Constellation veteran Mike Novy, is bullish about the brand’s future with SGWS. In addition, Sprinter and 818 Tequila, the brand founded by Kylie’s sister Kendall, have reorganized under the umbrella of the Calabasas Beverage Company—led by Novy as CEO—newly formed to streamline sales and marketing operations for the two brands.

Sprinter comes in an 8-can variety pack with Black Cherry, Peach, Grapefruit, and Lime flavors, retailing at $20. The 4.5% abv brand has initially proved popular in its home market of Southern California, as well as key states like Texas, Florida, and Illinois, says Novy. With the national alignment with Southern, Sprinter will look to build upon its current stable of roughly 16,000 accounts. A few months after launch the brand is already among the top 25 best-selling spirits-based RTDs in Circana channels. “That puts us in some very good company,” Novy says. “And it’s with one SKU, against brands that can have 30 or more.

“When you start to peel it back to pockets of growth, we see Massachusetts and Maryland,” he adds. “Phoenix and Tempe, Arizona, for example, and Columbus, Ohio, too. Basically places that are young intellectual hubs.” Novy adds that given the brand’s focus on consumers aged 21-35, he expects some shifting pockets of growth depending on whether college students are on large campuses or at home.

While Sprinter’s launch was significantly boosted by its famous founder, Novy says the next step is establishing Sprinter as a repeat purchase for its core demographic. “As we go forward, Kylie will always be a part of the communication of the brand and, quite frankly, management of it,” says Novy. “You’ll also see us do more experiential events. We want consumers to engage with and be a part of the brand.”

Joining forces with 818 Tequila (also aligned with SGWS), says Novy, was driven by demand from across the three-tier system. Utilizing one team for both brands made activation planning easier and simplified the brands’ positions within the distributor portfolio. “Sprinter gets the immediate benefit of the team that’s been able to live through the launch and the development of 818,” he says. 818’s U.S. volume is expected to rise to around 160,000 cases this year, after the brand adjusted pricing to meet its core 21-35-year-old consumer.

Early next year, Sprinter will release its second SKU, another variety 8-pack featuring four new flavors, as it looks to keep up its early momentum. “Our forecast is to continue developing into a significant player and get into that multimillion-case tier,” says Novy.—Shane English

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Beer Institute Reports Domestic Beer Shipments Down 3.5% in July – ProBrewer





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The Beer Institute has published its monthly estimate of domestic tax paid shipments by beer brewers for July 2024 which showed that beer shipments were down yet again with a decrease of 3.5% compared to July 2023. Year-to-date shipments are down 2.5% through July compared to the same period last year.

Only two months this year have shown an increase in shipments, February and May which were up 9.6% and 5.7% respectively.

The report follows dismal news from the National Beer Wholesalers Association (NBWA) which recently released the Beer Purchasers’ Index (BPI) for August 2024 that showed “a downshift in distributor sentiment to a more cautious outlook for the beer industry heading into the end of summer,” according to the NBWA.

The estimate for July 2024 volume shipments was 12,800,000 barrels, compared to 13,257,969 barrels in July 2023.

The Beer Institute gathers its estimates from the tax paid shipments by all U.S. beer brewers reported by the Tax and Trade Bureau (TTB).

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Afternoon Brief, September 6

Wine Business Visionary Vic Motto Dies at 84: It is with great sadness that we announce the passing of artist, musician, wine business advisor and co-founder of Global Wine Partners, Vic Motto, at his home in Florida on September 1, 2024…



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Interview, Part 2: Ben Dollard, President, Treasury Wine Estates Americas

September 6, 2024

In the second part of our interview, Treasury Wine Estates Americas president Ben Dollard discusses the company’s recent move to split its luxury and premium portfolios into two separate divisions, opportunities ahead for the 2-million-case 19 Crimes brand and 760,000-case Matua, as well as TWE’s key distribution partners across the country.

SND: What benefits are you expecting from the new company structure, with luxury and premium brand divisions respectively?

Dollard: The experience that consumers have at wineries with our luxury portfolio is very different from the experience they have when we think about our premium business. Those experiences happen at different places, they happen at different times, and they require different focus. We’re going to get very deliberate around how we approach both segments.

On the premium front, I’m really excited about the creation of what we’re calling our Bold Brands division. That is largely around the engagement with the next-generation consumer, how we think about the recruitment of new consumers to wine and make the category accessible. That’s the driving force behind the creation of our two business units.

SND: What’s the plan to restore growth for the 19 Crimes brand in the U.S.?

Dollard: Innovation plays an important role on a brand like 19 Crimes. Our partnership with Snoop Dogg has been a big component of that, with wines like Cali Blanc and Cali Gold (those two labels combined for 140,000 cases last year, according to Impact Databank). We also did a fairly significant amount of work around what we call our 19 Crimes Classics tier and the evolution of the package. That’s just rolling out now and we’re optimistic. Having the right types of activations and partnerships for the brand is important as well—UFC is one of them.

SND: Where else in the premium portfolio are you expecting to drive growth looking ahead?

Dollard: The Matua brand from New Zealand is doing well and we continue to see a growth path moving forward. We’ll also think very carefully about new innovation there, all with a lens around recruitment. We’re considering this ability for the consumer to enter the wine category and feel welcomed. That’s the role of the premium business, and 19 crimes and Matua are central to that.

SND: You’ve recently adjusted U.S. distribution, deepening alliances with RNDC and Breakthru following the acquisition of Daou. How do you expect the new route to market to pay off?

Dollard: We have important relationships with both RNDC and BBG, also Columbia in the Pacific Northwest, Empire in New York, Martignetti in Massachusetts, and many others. We’ve now solidified those relationships and made sure that we’re aligned around where we see the priorities and the opportunities looking ahead.

SND: How do you assess the current landscape in the wine market overall?

Dollard: I do think that there is absolutely an opportunity for the wine category generally to continue to engage. The opportunity can come in an array of different places in terms of how we build distribution or as we think about brand-building. But we need to be very authentic in that engagement, staying true to the stories behind our brands. That’s where we are focused, and we feel like we’ve got a brand portfolio that’s well suited to that, so I’m optimistic for the future.

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Austin Coffee Festival Returns This Month, More US Cities ComingDaily Coffee News by Roast Magazine

A scene from the 2023 Austin Coffee Festival. Press photo courtesy of Craft Hospitality, LLC.

The third annual Austin Coffee Festival is set to return to Texas’s capital on September 28-29, showcasing beans and brews from more than 40 of the area’s top specialty coffee roasters.

The Austin Coffee Festival is a production of the New York-based hospitality events firm Craft Hospitality. The firm is also behind the DC Coffee Festival (coming Oct. 5) and the San Francisco Coffee Festival (coming Nov. 9). The agency is also planning two new coffee festivals this year in Philadelphia (Oct. 19) and San Diego (Nov. 2).

Single-day general admission tickets for the Austin event, taking place at the Palmer Events Center off Barton Springs Road, were still available as of this writing.

A scene from the 2023 Austin Coffee Festival. Press photo courtesy of Craft Hospitality, LLC.

In addition to tastings galore of coffees, chais, teas and more, the event will include Coffee Convos, a series of panel discussions with prominent Austin coffee shop owners/operators and roasters. The Austin Coffee Collective is hosting a latte art throwdown with a $500 grand prize.

The event will also include a packed live music schedule, plus food available for purchase.

A scene from the 2023 Austin Coffee Festival. Press photo courtesy of Craft Hospitality, LLC.

The list of featured roasters for the 2024 Austin Coffee Festival includes: Fara Coffee, Barrett’s Coffee Roasters, Dog Day Coffee, Hard Charger Coffee, Malone Specialty Coffee, Carta Coffee Merchants, Medici, Trianon Coffee, Red Horn Brew, Luna Espresso, Sightseer Coffee Roasters, Haciendo Coffee Roasters, Kimbala, Merit, Far Horizon Coffee Company, Cuvée Coffee, Intelligentsia, Kilogram Tea, Casa Brasil, Vision, Kinship Milk Tea, Little City Coffee Roasters, Greater Good Coffee Co., Texas Grounds Coffee Company, Creature Coffee Co, Café Cultura, Tierras Planas Roasters, Café Azteca, Red Minas Coffee, Trippy Buck Coffee, Ostara Coffee Roasters, Brewcado Coffee, Redemption Coffee, Wollof Coffee, Doxa Coffee Roasters, Lazarus Brewing Company, Future Classic Coffee, Eiland Coffee Roasters, New Heights Coffee Roasters, Sorrento’s Coffee Drive Thru and more.


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Sweetener solutions satisfy consumer tastes

Known for leading the successful campaign for India’s independence from British rule and inspiring movements for civil rights and freedom across the world, Mahātmā Gandhi is quoted for saying, “Action expresses priorities.”

Likewise, when it comes to trends influencing the beverage market, consumers’ preferences for various sweeteners is being expressed through their drink purchases.

“There is a notable inclination toward natural sweeteners rather than synthetic alternatives,” says Linnea Halter, marketing coordinator at Global Organics, Cambridge, Mass. “In addition to cane sugar, consumers are choosing organic sweeteners including honey, agave syrup and coconut nectar. These sweeteners typically have lower glycemic indices than standard white sugar and are more nutrient-rich.”

Amber McKinzie, product marketing manager for sugar reduction at Cargill, Minneapolis, notes that sugar remains the most scrutinized sweetener, but artificial sweeteners aren’t far behind.

“Shoppers rank promises of ‘no artificial sweeteners’ among the most influential on purchase decisions but claims around sugar content — including ‘no added sugar,’ ‘reduced sugar’ and ‘sugar-free’ — also carry weight with large numbers of shoppers,” she says, citing 2024 Cargill proprietary consumer research.

“Most importantly, consumers are following through with actions,” McKinzie continues. “Innova’s database of product launches finds significant sales growth associated with many of the same sweetener-related claims. Beverages positioned as ‘low sugar’ delivered a double-digit 11% CAGR from 2019-2024, while sales for drinks with a ‘sugar-free’ claim posted an even more impressive 18% CAGR over the same period.”

Thom King, chief innovations officer at Icon Foods, Portland, Ore., says that sugar reduction remains a “massive” trend impacting consumer behaviors.

“People want less sugar in their beverages and they also want a clean label. Less sugar, no aspartame, no sucralose — and they want it to taste great,” he explains.

“As far as trends that influence the sweeteners market, gut health continues to be a priority to consumers,” King continues. “Prebiotic fibers support gut health and pair brilliantly with high-intensity sweeteners because of their characteristics that coat the tongue and allow for sweeteners to work their way across the palate, giving it the full sensory effect.”

Janae Kuc-Langford, marketing manager of beverage and nutrition categories at Ingredion, Westchester, Ill., points to health and wellness macro trends as reshaping the sweeteners market as consumers seek better-for-you options.

“According to an Ingredion proprietary sugar reduction study, 79% of U.S. consumers believe limiting sugar is important for their health,” she says. “Our Ingredion proprietary ATLAS research further reveals that 68% of consumers consider sugar-free claims important across food and beverage categories in North America.”

Crafted with real black tea, almond milk, and a touch of cinnamon and cane sugar, Califia Farm’s Chai Almond Latte is made with simple plant-based ingredients, is dairy-free, soy-free and gluten-free. Image courtesy Califia Farms

A variety of solutions

As consumers’ views of sweeteners have shifted in recent years, experts highlight how beverage manufacturers are turning to a variety of sweeteners in new product development.

Global Organics’ Halter explains how beverage-makers are choosing natural sweeteners to fit into clean label trends.

“Coconut nectar, prized for its low glycemic index and unique caramel flavor, is a favored option as it adds sweetness while enhancing taste, making it ideal for smoothies, energy drinks and flavored waters,” she says. “Agave syrup is another natural sweetener that is gaining popularity. With a low glycemic index and a neutral, sweet flavor profile … it is a versatile choice for reducing sugar in popular applications such as cocktails, teas and flavored drinks.

“Additionally, there is a growing trend of using agave inulin, a blend of agave inulin and sweet agave powder, for its sweetening properties and functional benefits that support gut health, making it suitable for functional beverages like fiber drinks and smoothies,” Halter continues.

Ihab Bishay, senior director of sweeteners at Itasca, Ill.-based Ajinomoto Health & Nutrition North America Inc., highlights how research and development teams are working to find diverse solutions that meet consumer demands for lower sugar content without compromising taste.

“Beverage manufacturers are using more and more sweeteners like aspartame and monk fruit to reduce sugar while preserving its sweet flavor,” Bishay says. “Taste and texture continue to be the major challenges associated with sugar reduction, which is creating white space for technological innovation, addressing this with upcycling, functional ingredients and fermentation.”

Cargill’s McKinzie points to stevia-based solutions as being featured prominently in beverage products, thanks to its sweet taste, zero-calories and artificial-free status.

“Today, Cargill’s sugar-reduction toolkit includes Truvia and ViaTech stevia leaf extracts, as well as fermentation-derived EverSweet stevia sweetener,” McKinzie says. “Thanks to its high sweetness, potency and clean taste, a small amount of EverSweet goes a long way in beverage formulations.

“With EverSweet, you get a cleaner, sweeter taste, with more upfront sweetness and less sweetness linger,” she continues. “Compare it to a Reb A-based stevia product, and the difference in off-notes and sweetness perception is night and day.”

McKinzie adds that erythritol is another key ingredient being used in many reduced-sugar beverage formulations.

“It pairs well with stevia and is used in many high-performing beverages,” she explains. “A combination of Truvia and Zerose erythritol may provide plenty of sweetening power for modest sugar reductions. For deeper sugar reductions, ViaTech or EverSweet may be a better choice, and for the most challenging formulations, our most advanced sweetener system, EverSweet stevia sweetener + ClearFlo natural flavor, is a game-changer.”

Icon Food’s King, notes that, in addition to organic Reb M stevia, there’s a growing interest in novel, protein-based sweeteners like thaumatin.

“We’re seeing more news about it and more major brands taking a look at using these clean label, plant-based protein sweeteners,” King explains. “Thaumatin is derived from the katemfe fruit and works best at very low inclusion levels of less than 0.05% as it is 2,000 to 5,000 times sweeter than sugar.

“Used in a small amount, it works as a natural sweetness modifier that boosts stevia and other high-intensity sweeteners to create a lingering sweet effect, allowing manufacturers to adjust the sweetness curve for the perfect flavor,” he continues. “I think we’ll start seeing more of these novel, protein-, plant-based sweeteners like thaumatin.”

King also anticipates the proliferation of allulose-based beverages as the industry moves closer to approving the sweetener in the EU. “I think once approved in the EU, Canada and Whole Foods, the market will catch up in adopting allulose as it’s a very functional sweetener that hasn’t gotten enough credit yet,” he says.

Crafted with USDA Certified Organic flavors and extracts, free from calories and artificial sweeteners, Nixie Organic Zero Sugar Sodas recently launched in Classic Cola, Root Beer and Ginger Ale flavors. Image courtesy Nixie

Mixing and mingling

As beverage-makers continue to develop sweetness profiles that cater to consumer preferences for healthier, natural and low calorie options, experts highlight how sweetener blending is being used in formulations.

Icon Food’s King explains that blending is essential to beverage formulations.

“It’s rare to find a new carbonated soft drink that just uses a single sweetener input because the taste experience is so different from what consumers expect with a full sugar beverage,” he says. “Often beverages that only use a single sweetener like stevia or monk fruit have a thin mouthfeel where the taste experience evaporates almost immediately. You drink it and it’s gone.

“Using fibers to extend the taste helps a lot, but fibers do more than just improve mouthfeel, they also aid in flavor conduction to make sure that sweetness is carried through the entire consumption of the beverage,” King continues.

Global Organics’ Halter also notes that sweetener blending can improve mouthfeel, especially in beverages that require a creamy or smooth consistency.

“Some sweeteners can alter the viscosity of a beverage,” she explains. “For example, combining agave syrup with sugar can enhance the thickness and body of syrups and smoothies.”

Halter adds that certain sweeteners have preservative properties, helping to extend shelf life.

“Blends can maintain flavor stability over time, which is crucial for bottled beverages,” she says. “Some sweeteners can help stabilize the pH of a beverage, which is important for maintaining taste and preventing spoilage.

“Blending also allows manufacturers to cater to health-conscious consumers by creating beverages that are labeled as ‘low-calorie’ or ‘naturally sweetened,’ which can enhance marketability,” Halter continues.

Cargill’s McKinzie says that, to attain higher levels of sugar reduction, sweetener blending is almost required.

“Erythritol, for example, boosts stevia’s up-front sweetness, rounds out its sweetness profile, and helps build back mouthfeel, without adding to the calorie load,” she explains. “As a further bonus, in the U.S., when used as a flavor modifier at an inclusion level of 2.5% or lower, erythritol may appear on ingredient statements as ‘natural flavor.’”

Ajinomoto’s Bishay highlights how combining different sweeteners allows the formulator to get closer to the overall taste profile of sugar.

“By combining different sweeteners, manufacturers can mask any unpleasant aftertastes and mimic the taste of sugar,” he explains. “Flavor scientists carefully stack different high-potency sweeteners to balance and mask any off-notes or aftertastes characteristic of any one sweetener. This technique helps keep product labels as ‘clean’ as possible while reducing sugar content and meeting consumer expectations for taste and texture.”

Flavor scientists carefully stack different high-potency sweeteners to balance and mask any off-notes or aftertastes characteristic of any one sweetener. This technique helps keep product labels as ‘clean’ as possible while reducing sugar content and meeting consumer expectations for taste and texture.

A sweeter future

Although taste determines the success of any product, experts anticipate that factors including sugar and calorie reduction, as well as clean label trends will continue to influence the sweetener market going forward.

Icon Food’s King expects that sweetener blends will continue to be the preferred choice for beverage manufacturers.

“Not only are they formulated to replicate the taste and mouthfeel consumers expect from sugar, they offer cost advantages as well as reducing the margin for error,” King says. “By adding one sweetening system instead of separate ingredients, it can provide greater consistency in your product and mitigate risk.”

Ajinomoto’s Bishay predicts that growing health and wellness trends will only further impact the market.

“Consumers are increasingly interested in the ingredients of the products they consume, and as the desire to reduce sugar intake grows, so does the demand for better-tasting, better-for-you options,” he explains. “Consumers are also looking to reduce sugar for long-term health versus just weight loss. This entails a holistic focus on immune health, digestive health, gut health, and more which is why functional sweeteners are gaining consumer excitement.”

Cargill’s McKinzie notes that another trend to watch out for centers on sustainability.

“Many beverage manufacturers have set bold sustainability goals around water, land use and carbon emissions,” she explains. “Ingredient sourcing will play a major role in their ability to meet those targets.”

Johnny Salazar, category manager for agave, honey and date syrup at Global Organics, lists several factors that he believes will hold major influence on the sweetener market going forward.

Looking ahead, Salazar anticipates that “consumer preferences in which health needs and diets will become a priority.” Meanwhile, technological advancements will help reduce aftertaste and enhance functionality in formulations, he says.

Other influencers include economic factors that “will spin off in costs of raw material and supply chain stability, sustainability and environmental concerns, such as water usage, land use and overall carbon footprint,” Salazer says.

“These factors will influence how sweeteners are developed and consumed in the coming years,” he concludes.



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Suntory talks trends and innovation in travel retail

Suntory Global Spirits, the owner of brands including Jim Beam Bourbon, Laphroaig Scotch and Yamazaki Japanese whisky, has been “investing heavily” in global travel retail (GTR) as it looks to capitalise on the post-pandemic recovery in global travellers.

Ashish Gandham, the managing director of the company’s GTR business, sat down with Just Drinks to discuss trends in the channel, the differences with domestic retail shoppers and why ‘premiumisation’ can be a troublesome term to throw around.

Henry Mathieu (HM): How has Suntory’s travel-retail business fared since the pandemic?

Ashish Gandham (AG): For the category as such, the anticipation was there that by 2024, travel retail as a category for all industries, especially alco-bev, will be back by 2024 at the same levels that it was pre-pandemic.

That includes passengers back at the same levels, their spending will be back, and so on and so forth, so overall value as well. What we’ve seen is passengers are back to at a higher level compared to pre-pandemic. Some pockets are leading the growth, some pockets are slightly lagging behind due to mix of nationalities that are travelling or not travelling. Overall, the channel and the category has recovered. 2023 and early 2024, all indications that the category is back and has surpassed pre-pandemic levels pretty much everywhere.

HM: Would you say the category is fully beyond the Covid hangover then?

AG: Would we say that the Chinese travellers are back in the same numbers? Maybe not. There are some ups and downs. However, if you include Hainan as part of the travel-retail space that was created during the pandemic and has continued to add a certain value, that’s one.

Indians, as a nationality, are travelling more than they used to. They’re covering up some of the gaps we have from the Chinese nationality and other travellers, as well as their spend. Some of the other nationalities in Asia like the Vietnamese are spending a lot more than they would have initially and they’re travelling more so the natural growth of certain emerging markets and their nationalities has helped compensate some of the others.

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Also, post-pandemic, there was a natural trend where people started travelling more than what they would have and what we saw was almost like revenge travel that started. Even today, for example, airlines are at capacity and adding capacity. There are more orders in terms of backlogs, in terms of plane orders. If you look at it, a couple of new players have emerged in the airlines industry.

There are certain nuances where, in the initial phase of recovery, we saw average basket spend go up significantly. Penetration was high, footfalls were high, conversion was high and average basket spend too, so the quality of passengers was higher. Those were the first ones to travel, the affluent or business travellers got onto planes first, and hence their propensity to spend was higher and that was reflected. Over time that has plateaued, or in some locations that has started going backwards, back to pre-pandemic levels. So, when I say the category has come back at an overall level, value-wise, when I speak to most of my customers, everybody tells me that their retail sales value is higher than pre-pandemic.

HM: Have some of these numbers fallen off more recently?

AG: Now, what they’re saying is, in the last six months, penetration numbers have started dropping. That means fewer people are walking into the store. Airports are busier and they have more passengers but not everybody is walking into the store. As soon as the quality of passenger has dropped, penetration numbers have started dropping.

Conversion is up still but the average basket spend has dropped as well, so there are ups and downs in the algorithm, but overall, it is still a positive sign for the industry.

HM: What effect has the partial return of Chinese travellers had on the GTR market in the last year or so?

AG: At an overall level, there is some impact. It is not as big as to impact the overall category negatively. There are other nationalities that have helped, or the absolute percentage spending of certain nationalities going up has helped, but in pockets, like, for example, Singapore or Thailand, in those locations, the number of Chinese travellers, if they are down, the impact on those particular locations has been significantly higher.

Overall, the number of Chinese travellers hasn’t yet hit pre-pandemic levels across all locations. Hainan became a viable source of duty-free products for the Chinese through the pandemic. If you look at the pyramid, initially, the Chinese [who were travelling] outside China to get luxury products, duty-free products, were getting the same thing available in Hainan.

Ashish Gandham, MD of global travel retail at Suntory Global Spirits
Ashish Gandham, MD of global travel retail at Suntory Global Spirits

Now the expectation was, as travel opens up, you will still see at the top of the pyramid that the more affluent travellers and consumers still travel abroad. We started seeing that, whether they were travelling to Japan because the Yen has weakened, or they were still travelling to the usual destinations, transiting in Dubai, going to Paris, London, etc.

We started seeing that the bulk of the travellers were split. Some were still going to Hainan and then the macroeconomic situation in China meant that curve did not continue long enough for a full recovery of the Chinese traveller in terms of pure tax numbers. Even if they are travelling now, the macroeconomic situation back home is also impacting their spending patterns. A Chinese traveller typically bought a slightly more elevated offering, whether it was in from another state or an exclusive so that spending has slowed down. Even if they are travelling, they are not spending at the same level.

HM: Is ‘premiumisation’ still a key aspect of Suntory’s strategy despite the presence of more less affluent travellers?

AG: Normally what premiumisation would mean is people talking about pricing and taking price on existing core products. In 2021 and 2022, as the category was bouncing back post-pandemic, we saw there was more demand than supply. There was also COGS (cost of goods sold) inflation, so combining those two factors, the natural tendency was to take price. A lot of categories saw pricing accelerate. If that is the paradigm of premiumisation, I think that will be tempered for sure.

The overall trend of premiumisation, however, will continue in a different way. Firstly, travel-retail shoppers still expect deeper, richer experiences. They are in a slightly more exploratory and elevated state. Compared to the domestic market, consumers or shoppers tend to spend a bit more in travel retail. That is a great tenet to hold on to. If we can convince them that this product is great value for money – and when I say value for money, it does not mean a discount but value for money for what they are paying, getting the requisite value from an emotional perspective – then they will continue to upgrade versus domestic. That premiumisation trend will continue.

HM: Is that a distinguishing feature between GTR customers and domestic retail consumers generally?

Ashish Gandham: What happens typically [in] traditional off-trade in domestic markets, you are either in a ‘stock-up’ mode or you have an immediate need. In that space, what a consumer does is buy a regular product that they drink every day for stocking up, or something that they can share with their friends.

Cut to travel retail, the occasions that consumers and shoppers tell us they are looking for, as they are travelling, is gifting for business stakeholders or family members, or for themselves. That would mean you’re trying to pick up something that is not your regular stuff and that means you’re spending higher.

HM: When do you estimate volume sales will return to pre-pandemic levels?

AG: I think this year will be an inflection point. In the last six months, the situation has changed dramatically. Two or three factors have contributed. We are still seeing passenger growth and I talked about how fewer people are walking into the store but they’re also looking at different things and macroeconomic situations indicate consumers will start looking at value for money in a different way. They’re also trying to maximise their allowances so a greater percentage of people will continue to buy regular products but at a slightly valued discount compared to domestic markets.

A bottle of Laphroaig whisky, part of the Suntory Global Spirits portfolio. Credit: Suntory Global Spirits

Also, supply situations have eased. That means the demand and supply dynamic has shifted. That has also been exacerbated by domestic markets, where some of the domestic markets are seeing consumption slow down. All of that has meant there is more stock available, there is more product available, there are promotions and offers back on the shelf. Brands which are getting the balance right between those promotions and the demand will start to see more traction.

I would assume that by 2024 end, you will see volumes back to pre-pandemic level but the volume-to-value mix for this year particularly will be different. Overall, by the end of 2024, the category size versus pre-pandemic is still expected to be a lot higher but the volume will be back.

HM: What is Suntory Global Spirits’ innovation strategy for GTR?

AG: We are relatively young in this space, in travel retail. If you think about it, globally, before the Courvoisier divestiture, we were number three in the world in travel retail. When we started, let’s say 2019, we were number seven coming out of the pandemic. We recovered faster, getting up to number six. Our recovery in this channel has been faster because we have historically had more headroom to grow. We also realised this is a channel which lends beautifully to what we want to do as a company.

If you look at what our CEO says, we want to be the most admired premium spirits company in the world. The way we will do this is by bringing quality product but also creating rich experiences and, when you talk about product and experiences together, innovation needs to sit at the heart of it. In travel retail, why we’ve grown faster is because we’ve started investing in travel retail more than what we have historically for us. Travel retail is a brand-building channel. We will look to grow the scale of our presence in travel retail and it will be an exemplification of the Suntory Global Spirits strategy, which is about getting quality products, innovative products and to deliver rich experiences in this channel.

HM: What products and brands are you looking to prioritise?

AG: Innovation will remain crucial at both product and experience level and we will continue to invest in this channel at a category and product level. With Courvoisier being divested out of, we are a whisk(e)y company. We understand whisk(e)y better than most other competitors.

In terms of whisk(e)y, we want to make sure that we lead the way when it comes to what kind of innovations consumers are looking for. A lot of consumers are still in an explorative state in terms of whisk(e)y, what kind of whisk(e)y they like, and constantly their repertoire is widening. They’re constantly trying different products. For us, owning the innovation space within the whisk(e)y category is going to be crucial. We will look at all price brackets, give authentic products that have provenance, whether it is an American whiskey or a Japanese whisky but, across price ladders, we will be able to bring those innovations and that will be one of the key focus areas for us.

HM: How have you been dealing with volatile supply costs and inflationary pressures?

AG: I would say supply logistics is going to be a facet of business that we will need to get better at managing. That’s going to be a reality. It’s not constrained to alco-bev, it’s across the board. What that would mean is there are certain decisions that we’ll make in terms of what kind of product and what kind of pricing we are able to afford for our products when we make it available to our consumers.

A bottle from Suntory Global Spirits’ Maker’s Mark Wood Finishing Series. Credit: Suntory Global Spirits

I think overall, post-pandemic, we saw logistics costs go up dramatically. We also saw inflation was at an all-time high and hence input costs in terms of raw material were also high. Have we seen that flatten a bit? Yes. I think every company will agree. Have they gone away completely? No, there is still inflation and there are still challenges. You still see port congestions, demand outstripping supply in terms of containers, etc. There are still going to be some inflationary costs that we need to manage and that’s going to be business imperative to manage over time.

HM: Are these the biggest challenges that you’re likely to face over the next 18 months or so?

AG: If we look at our industry as alco-bev and within travel retail as well, the biggest element that we need to really focus on is driving consumption. We need to get to the heart of what is the consumer expecting [and] what is the sweet spot of what they’re willing to pay for a certain product.

We need to get closer to understanding their data and their insights. The top two or three customers that we have, people who’ve been in the industry, we met during TFWA (Tax Free World Association) in Singapore, and the single biggest thing we said that we aren’t doing very well, in spite of all the technological advances, is using data effectively.

We take a look at data at a certain level but we are not looking at consumer data and consumer insights effectively. The biggest thing to be done is understand what consumers are looking for, getting deeper in those insights, getting closer to the consumer, so that we can offer the best possible product at the best possible price.






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