Could duty-free retail save champagne?

Treating oneself to a bottle of discounted high-end alcohol is a routine for many vacationers, making duty-free locations worldwide lucrative spots for premium bubbles. However, like many areas of luxury, the champagne category is struggling. Following the post-Covid travel resurgence, champagne sales hit a record $6.5 billion in 2022, with 326 million bottles sold, according to the Comité Champagne. Since then, sales have dipped, with 299 million bottles sold in 2023, down 8.2%. On January 18, the Comité reported that overall champagne shipments in 2024 fell to 271.4 million bottles, a 9.2% decrease from the previous year. The news of this plummet has set a pessimistic tone for champagne brands in 2025. That said, with the Chinese New Year holiday officially commencing next week — and a wider 40-day traveling period starting on January 14 — the opportunities within the duty-free sector are becoming increasingly crucial. After all, according to Inkwood Research, China’s travel retail market is projected to grow from $16.64 billion in 2024 to $27.57 billion by 2030. Andrew Bardsley, brand director for Prestige & Ultra-Prestige Spirits at Pernod Ricard Global Travel Retail, says that, unlike other sectors, there is a strong demand for champagne across the duty-free industry. “Last year, this spurred Pernod Ricard Global Travel Retail into reviewing this evolving trend, resulting in Perrier-Jouët, in particular, starting to secure listings back in some exciting GTR locations.” Self-care shift As champagne brands consider turning to travel retail amid a period of tempered consumer spending, it becomes imperative to carefully consider the distinct characteristics and preferences of the traveling demographic. At the 2024 Tax Free World Association (TFWA) conference, world-leading travel retail organization 3Sixty explained to Jing Daily that gifting accounts for 20-30% of sales in the industry. Yet, the trend has evolved, with self-indulgence now playing a key role in purchasing behaviors at airports. In short, people are increasingly gifting themselves rather than others. This shift suggests that champagne brands should be incorporating experiential retail within airports instead of simply selling products. Consumers are more likely to sip champagne to treat themselves rather than purchasing an entire bottle. Capturing the opportunity, Australian wine producer Penfolds unveiled an installation in Sanya, Hainan, in December 2024, providing a dynamic tour of its new champagne collection. The activation, titled “Champagne Through a Penfolds Lens,” featured tastings, digital storytelling displays, and a showcase of Penfolds’ Champagne portfolio, reflecting the company’s commitment to the travel retail sector. Taste converts to trade Though not champagne, Bottega’s prosecco bar is another exemplary premium beverage retail formula to follow, experiencing growth while others face a challenging sales period. On the success of the concept, Claudia Gambin, senior sales executive at Bottega S.p.A, says, “In airports, people are looking for a moment to themselves. When you’re at the airport, the trip has already started, so there’s a big Instagram moment to be had too.” In fact, for Pernod-Ricard, Bardsley says that there has been huge global demand for its two Champagne brands, Maison Mumm and Maison Perrier-Jouët, particularly in the on-trade, reflecting the power of experiential installations such as tasting. Aspiring to connect intimately with high-value consumers, Lotte Duty Free also hosted an exclusive champagne tasting event for VIP customers last summer at its Myeongdong store in Seoul. Showcasing premium offerings like Veuve Clicquot La Grande Dame, Dom Pérignon Vintage 2013, and Armand de Brignac Brut Gold, the session, led by Moët Hennessy Asia Pacific Education and Training Manager Kelvin Chua, included Champagne etiquette and pairing tips. With LVMH’s Champagne sales declining by 15% in the first half of 2024 compared to the same period in 2023, duty-free retail remains a critical avenue for revitalizing growth. Amid evolving consumer preferences, experiential retail is emerging as a key driver. Events like Penfolds’ Hainan showcase and Lotte Duty Free’s Seoul tastings exemplify how brands can engage high-value consumers with curated experiences. Additionally, the rise of self-gifting offers significant opportunities. To remain competitive, champagne brands must innovate beyond traditional sales, embracing tailored marketing strategies that resonate with both travelers’ aspirations and the shifting dynamics of global luxury markets.

Could duty-free retail save champagne?

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Published January 22, 2025

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Could duty-free retail save champagne?