The global spirits market is witnessing significant shifts as the travel retail sector bounces back from the effects of the pandemic. According to a recent report from International Wine and Spirits Research, IWSR, a leading source of data and analysis on the global alcoholic beverage market, premium spirits are showing robust growth, led by categories such as agave-based spirits and brandy, while others like vodka and gin face headwinds.

The report indicated that  as consumer preferences lean towards high-end experiences, brands are capitalizing on the renewed demand for prestige-plus products and innovative ready-to-drink (RTD) offerings.

Agave-based spirits, particularly tequila, are leading the premiumisation wave, with a staggering 58% increase in value last year. This growth is driven by a surge in demand for luxury expressions, positioning agave as one of the fastest-growing categories. Similarly, Scotch whisky, the largest category by volume, saw a 30% rise in value, reflecting the market’s appetite for premium spirits. American whiskey also recorded a 28% increase, further cementing the trend towards high-end offerings in the global travel retail (GTR) channel.

Brandy, traditionally a smaller player in travel retail, is gaining momentum. IWSR predicts a 5% volume growth and a 7% rise in value for the category between 2023 and 2028. The increasing consumer interest in quality brandy, particularly in travel retail, is fueling its steady growth.

In contrast, categories such as vodka and gin have faced challenges. Despite a slight 5% value gain in the vodka category following a post-pandemic rebound, sales volumes have continued to decline. Gin, which struggled due to shrinking demand in major domestic markets like the UK and Spain, has seen reduced travel retail ranges.

Cognac, meanwhile, continues to stand out in the spirits sector, with consistent double-digit volume growth. The category made headlines in May 2024 when Campari Group acquired Courvoisier from Suntory Global Spirits for $1.2 billion. This acquisition highlights Campari’s strategy to boost Courvoisier’s presence in Asia Pacific, with plans to increase its market share from 8% to as much as 20% in the next five to ten years.

Beyond brandy and tequila, the report also highlights the growing prominence of premium RTD products, which have surged in popularity due to their convenience and innovative flavour profiles. These products are increasingly being showcased in travel retail, with high-end brands focusing on experiential marketing to capture consumer attention.

Liqueurs, led by brands such as Baileys and Aperol, have also made impressive strides. Aperol, in particular, has experienced strong double-digit growth, bolstered by cross-channel promotions in European leisure travel markets. Campari Group has leveraged its sponsorship of global events like the Australian Open to create immersive consumer experiences, while Baileys has taken the lead in sustainability with the introduction of an aluminium bottle that reduces carbon emissions by 44%, reflecting the growing importance of eco-friendly practices in the travel retail space.

Despite the mixed performance of some categories, the overall outlook for the spirits market in travel retail remains positive. Premiumisation is expected to continue driving growth, with IWSR forecasting a 115% increase in “status spirits” sales between 2022 and 2027. Cognac and brandy are projected to maintain their upward trajectory, while agave spirits are set to expand at an 11% compound annual growth rate (CAGR) between 2023 and 2028. This strong growth is supported by the recovery of key travel markets in Asia Pacific, where countries like India and Australia have rebounded significantly post-pandemic.

Looking ahead, the spirits industry is poised for continued growth, driven by premiumisation and the expanding role of travel retail as a key market for high-end products. As consumers seek out quality moments and special occasions to indulge, brands are focusing on offering tailored, immersive experiences that resonate with the modern traveler. Whether through innovative product launches, sustainability initiatives, or experiential marketing, the future of spirits in global travel retail is bright, with premium brands leading the charge.