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Treasury Wine Estates looks to double the size of its travel retail business

Published:  24 March, 2014

Treasury Wine Estates wants to double the size of it travel retail business within five years as it steps its distribution with exclusive and premium wines to airports, cruise ships, ferries and other key travel wine sectors.

The move is part of a new direction for the company which has saw Tom King join the business from Bacardi last year to head up its new travel retail division.

A key feature of its travel retail plans includes the roll out of standalone Penfolds shops in key airports around the world. The first one of which is now a 35 square metre site in place in Sydney airport offering travellers the chance to see and purchase wines from across the Penfolds estate up to its coveted Grange wine.

King told at this week's ProWein that whilst accounts for 48% of the total liquor market in general retail, its share is only 20% in travel retail which is dominated by the major spirits brands. The opportunity is therefore wide open for wine companies to really steal a march and help grow the wine business in travel retail.

He said it was in discussions with all the major travel retailers, including Nuance, World Duty Free, DFS, Dufry and Heinemann, about how it can partner them and help grow the overall travel retail wine market.

"We have had really positive feedback from all the major travel retail players as we want to help them to grow the overall wine category and not just talk to them about our own brands," said King.

By developing its travel retail business it will also provide real cutting edge consumer understanding for its main wine business as it looks to tailor it travel retail portfolio to the types of consumers passing through different airports around the world.

"We will be able to tailor our offer in different locations based on the kind of people who pass through that airport," said King.

It is currently carrying out the first comprehensive consumer research study to better understand the wine category within travel retail with interviews with passengers at 15 of the world's major airports. "This has the potential to provide really powerful insights," said King.

Travel retail was also the ideal market for developing and trialling new launches, added King. "A lot of the spirit companies use travel retail to trial new product development and for picking up trends that can be applied in their markets," he explained.

It is, for example, introducing a new Wolf Blass exclusive range to the travel retail market with a Cabernet  Sauvignon, Shiraz and Chardonnay retailing at around £15.

King said the opportunity for wine companies was potentially enormous in travel retail with the average passenger spending up to 73 minutes waiting for flights once they have gone through security.

ProWein was now becoming seen as a key business hub for the travel retail market with major buyers from around the world coming to the show to meet customers and find new business, said King.