Duty-Free Liquor Market Size, Share, and Industry Analysis By Type (Beer, Wine, and Spirit), By Distribution Channel (Airports, Railway Stations, Cruise Ships, and Others), and Regional Forecast till 2032

The global duty-free liquor market is witnessing significant growth due to the increasing disposable income of the middle-class population and rising investments in the duty-free retail sector. The duty-free retail shops have helped airports, railway stations, and other similar segments to generate greater revenues all over the world. The revenue generated by these duty-free retail stores is utilized for infrastructural development and continuous up-gradation. For instance, according to a survey report provided by Airports Council International-North America, the U.S. airports are expected to require more than USD 128 billion in infrastructure upgrades by 2023. Duty-free liquor is a dynamically emerging segment of the duty-free retailing industry owing to the increasing sales of beer, wines, and spirits in duty-free stores.

The COVID-19 pandemic led to a significant impact on the global duty-free liquor market. The global imposition of lockdown into the ban on international travel restricted social gatherings and declined on-premise sales. This has significantly affected the revenues generated through the duty-free liquor market. However, the post-pandemic scenario of the global market has seen a gradual recovery owing to resumed traveling facilities.

Duty-Free Liquor Market Driver

Increasing Demand for Duty-Free Alcohol to Uplift the Market

There has been a significant growth in the demand for alcoholic beverages across the duty-free retail channels. Consumers are increasingly buying liquors for consumption and gifting. Even though there has been a gradual shift in the market due to the changes in global consumption trends and regulations, the allowance for duty-free discounts keeps steady growth in the market. Moreover, the exemption of liquor products from taxes and duties makes duty-free stores an attractive option for consumers seeking premium alcoholic beverages at economical prices.

Duty-Free Liquor Market Restraint

Regulatory Complexities in Duty-Free Operations May Hamper the Growth

The duty-free operators are bound to comply with the set of regulations imposed by both the departure and arrival countries. Frequent changes in duty-free allowances and trade agreements directly affect the revenues generated through these channels. Furthermore, the economic fluctuations in consumer spending also reflect the sales at duty-free retail shops. Therefore, the regulatory complexities associated with duty-free operations are one of the major factors anticipated to restrict the growth of the market.

Duty-Free Liquor Market Opportunity

Emerging Geographical Expansion to Untapp New Growth Opportunities

The global market holds a competitive edge with the presence of major players, especially in North America, Asia Pacific, and Europe. These players are actively involved in undertaking strategic moves to expand their consumer base. Therefore, the increasing penetration of new liquor products in the market is expected to create lucrative growth opportunities in the long run. The continuous progress towards innovative product launches is gaining major traction, attracting tourists to buy the liquors available at economical prices. For instance, in April 2019, the leading manufacturer of alcoholic beverages in Poland, PRAVDA Sp. z o.o. announced to activate the travel retail at The Loop New Zealand's duty-free store in Auckland International Airport. The company confirmed making its spirit products in the Pravda Vodka range available in departures and arrivals stores at the airport premises for customers seeking premium spirits.

Segmentation

Key Insights

The report covers the following key insights:

• Overview of the Global Parent Market
• Supply Chain Analysis
• Regulatory Analysis
• Industry SWOT Analysis
• Key Industry Developments
• Qualitative Analysis Related to COVID-19

Analysis by Type

Based on type, the market is divided into beer, wine, and spirit.

The spirit segment is expected to hold the largest share of the market. The segment growth is attributed to the growing premiumization of liquor products, especially white-spirit cocktails. Increasing consumer demand for premium spirit offerings in the travel retail market is projected to expand the segment growth in the forthcoming decades.

The beer segment is anticipated to show significant growth during the forecast period. The segment growth is attributed to the availability of versatile categories in the beer segment, appealing to a broad spectrum of beer enthusiasts. The segment offers popularly consumed varieties of lagers and ales, which are often purchased for social gatherings and gifting. The product in this segment employs moderate alcohol content and a broad range of flavor profiles, making it a popular choice for travelers seeking refreshing beverages.

Analysis by Distribution Channel

Based on distribution channel, the market is subdivided into airports, railway stations, cruise ships, and others.

The airports segment is expected to hold the largest share of the market. The segment has evolved as a potential hub for the growth of the market with increasing passenger traffic and growing transformation of retail channels within these facilities, offering lucrative business opportunities. The enhanced customer experience at airport premises is attributed to the growing adoption of digital initiatives by airport retailers. This includes virtual assistance, mobile apps, and other digital facilities that offer personalized notifications to navigate through the airport and ease of transactions, providing a convenient shopping experience. These factors contribute to the segment growth during the forecast period.

The cruise ships segment is anticipated to show significant growth during the forecast period. The segment growth is attributed to the increasing number of millennial cruise travelers and vacationers. According to the industry body, Cruise Lines International Association (CLIA), around 31.5 million people opt for cruise travel trips in 2023, with an increase in growth rate of 54% since 2022, which is projected to reach 39.5 million by 2027. The total number of ocean-going cruise vessels is expected to exceed 300 by the end of 2024. Moreover, the increasing retail sales of liquor products, particularly whiskey and vodka on cruise ships, are expected to propel the segment growth.

Regional Analysis

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Based on region, the market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Asia Pacific is expected to account for the largest share of the market during the forecast period. The regional market is highly dynamic in nature with the burgeoning economies, increasing number of travelers, and rising middle-class population. The region has, therefore, become a potential hub for retail activations. The major economies contributing to the dominance of the duty-free liquor market in the region include China, Japan, India, and South Korea, featuring a diverse array of consumer bases seeking premium duty-free alcoholic beverages. The continuous flow of passenger traffic at airports, railway stations, and other channels is anticipated to accelerate the growth of the market during the forecast period.

The Europe market is projected to be the fastest-growing region during the forecast period. The regioal growth is attributed to the rising inflow of travelers in the region from Asian countries, specifically China. Moreover, the major companies in the region have extensive global networks, which ensures the revenue generated through massive client bases.

Key Players Covered

The report provides the profiles of the following key players:

• Wines Group (U.S.)
• Beam Suntory, Inc. (U.S.)
• Constellation Brands, Inc. (U.S.)
• Campari Group (Italy)
• Pernod Ricard S.A. (France)
• Bacardi Limited (Bermuda)
• Ardbeg (U.K.)
• Diageo Group (U.K.)
• Angus Dundee Distillers PLC (England)
• Chivas Brothers Limited (U.K.)

Key Industry Developments

• In February 2024, a U.S.-based cruise line, Holland America, announced to sign of a partnership agreement with the leading American distillery, Kentucky’s Buffalo Trace Distillery. This development is done to make whiskey (single-barrel bourbon) available in the Ocean Bar of each Holland America ship.
• In December 2023, the leading beverage manufacturing company in travel retail, Pernod Ricard Global Travel Retail, and Delhi Duty-Free Services Private Limited, the duty-free retail company in India, together launched the very first Delhi limited-edition packaging design for the Royal Salute 25-Year-Old blend. The company aimed to cater to the rising demand for premium alcoholic beverages at their airport locations.