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“If we play the role we should as category captain, then we’ll see growth for our brands and for the category.“ |
Dayalan Nayager Regional Director Europe Diageo GTME |
Single malts represent the fastest growing segment of the whisky category in travel retail today – and it’s a segment in which Diageo Global Travel & Middle East (GTME) is determined to reinforce its credentials as drinks category leader.
That’s according to Diageo GTME Europe Regional Director Dayalan Nayager, speaking to The Moodie Report after the brand owner launched Talisker Neist Point. The line is the third travel retail exclusive single malt from the Talisker distillery, joining Talisker Dark Storm and Talisker Skye.
“At US$800 million, malts is a massive category; it showed +12.5% growth in travel retail last year but at Diageo we outstripped that with +28% growth in the same period,” he says.
Talisker will be a major lever for that approach, especially in Europe, where Diageo has a 4% share of the malts market. Talisker is the company’s clear lead brand in this region. Of the other major malts in the portfolio, The Singleton is identified mainly with Asia Pacific, Oban is the focus brand for the US market while super-premium Mortlach takes a global approach.
Nayager says: “It makes sense for us to concentrate on Europe with Talisker. It builds the category and reinforces our goal to use malts as part of our drive to bring joy back to the journey and to create world-class executions in the channel.”
Travel retail is a key platform for Diageo’s malts business, and tailoring exclusives to the channel is the right way forward, he adds.
“What consumers in travel retail are looking for is that exclusive purchase, the opportunity for sampling and interacting at the point of purchase. Dwell time in travel retail is a lot higher than in other stores so having the chance to engage is important. A category as exciting as malts, with Talisker as something different and only available at the airport, is a big opportunity.”
Diageo GTME has made “good progress” in executing the malts strategy in travel retail in the past year, says Nayager. “We are the global leader in malts in that we have 43% of the industry inventory and through the 28 distilleries we are operating. Based on that we have a true portfolio that is diverse and allows us to target every shopper and every occasion. That means everything from special releases to every day drinking malts.
“That range allows us to drive the category. Blends is the bigger part of whisky but the growth in malts is phenomenal and more consumers are looking for something different.”
Diageo is investing behind its malts strategy, says Nayager, with tastings, education and in-store activations (Heathrow Airport above, Edinburgh Airport below) |
The broad portfolio is an important aspect, he notes. “In most categories you have the pricing ladder and if you can play across most of the rungs on that ladder, it gives you an advantage. It helps you to introduce consumers to the category and later trade them up to new products.”
Malts is a highly competitive segment, so how is Diageo aiming to set its brands apart from the rest?
Nayager says: “Part of the strategy is bringing the joy back to the journey, and giving people something special at the airport. We want to create an engaging shopping experience and encourage more people to visit.
“In malts we have invested heavily in quality training and education, tastings and interaction to convert footfall into penetration and to encourage spend. We know sampling works well in Europe and have rolled out a number of campaigns in the past year. Education is also vital. We are using digital technology and devices like sensorial sticks to take people through the properties of each distillery, we have brand ambassadors who recruit and engage, and we’re constantly training them so they can communicate the differences between each malt in our portfolio. If we play the role we should as category captain, then we’ll see growth for our brands and for the category.”
The company is taking a category approach to whisky in the stores, but Nayager says there is also an opportunity to segment and showcase malts within that. “We have done campaigns around the total category like the Single Malts Club, where we show malts as part of whisky but in a separate way. That can work very well, as it did at Edinburgh Airport for example.”
Nayager says that travel retail partners now understand the malts opportunity and are reacting to the requirements of brand owners. “We work closely with retailers to deliver a premium, differentiated shopping experience. We know that shoppers tend to drink more for special occasions and when they unwind; so the question is how we use the store to evoke those occasions and to get the consumer into that unwinding mode?
“We are getting support from our partners and have activated some great promotions in the past year. The Single Malts Club was one, and that is being rolled out now. Another is a cruiseline campaign to create a whisky house, allowing consumers to attend seminars and tastings. So our partners see the value of working with us and playing a part in that agenda to grow malts.”
Looking ahead, Nayager says there is good reason for Diageo GTME to be upbeat about the malts business in Europe in 2016.
“We plan to drive more sampling as well as more and bigger promotions this year. We have strong ambition and a powerful vision for malts. We are putting big investment behind the brands and we see them growing healthily into the future.”
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Talisker Neist Point is the latest in a range of malts aimed at boosting Diageo’s profile in the category (Hover over the image with our unique Moodie Magnifier to view in greater detail) |
