Lotte Duty Free Showcases Glenfiddich Grand Yozakura 29yo As Single Malt Sales Triple In Q1

Lotte Duty Free is the only downtown duty-free retailer in South Korea to stock Glenfiddich’s Grand Yozakura 29-year-old this spring, and its placement comes as the retailer’s whisky sales soared in the first three months of 2023.

The exclusive Scotch is the first limited edition product of the spring season for Lotte, and it is also the first whisky to be matured in ex-Awamori casks in Okinawa, Japan, making it a very rare single malt. Awamori is the oldest distilled alcoholic spirit in Japan.

The new line is part of Glenfiddich’s Grand Series whose single malts are characterized by unusual and experimental finishes. Global brand director Claudia Falcone has described this latest addition as “perhaps the most ground-breaking expression to sit alongside the series so far.”

Predecessors include Glenfiddich Grand Cru (aged for 23 years in American and European oak casks and finessed in French Cuvée oak); Gran Reserva (aged for 21 years in European and American Oak and finished in Caribbean rum casks); Grande Couronne (a 26-year- old Scotch matured in American and European oak, then finished for up to two years in French Cognac casks); and Gran Cortes (aged for 22 years in sherry oak and finished in very rare Palo Cortado sherry casks).

In the U.K., only Harrods and a few other retailers will be carrying Grand Yozakura which has a retail price tag of £1,500 ($1,870). In duty-free and travel retail, the roll-out is into selected airport locations in Europe and Asia only.

Sales of liquor products at Lotte Duty Free increased by about 87% in the first quarter compared to the same period last year, while sales of single malts more than tripled over the same period. The sharp increase reflects, not just a return to travel by outbound South Koreans—who can take advantage of a substantial duty-free limit of $5,000 in certain downtown stores when they fly out of the country—but a price advantage too.

Moreover, the freedom of Chinese nationals to travel again means that now is a good time to ramp up the single malt category again as it is a favorite in mainland China. Lee Jung-min, head of Lotte Duty Free’s product division, said: “In the case of liquor, duty-free shops have excellent price competitiveness compared to local stores, so the number of customers looking for liquor is steadily increasing.”

As a result, Lotte is introducing a variety of alcoholic beverages, including new malt whiskies, to its shelves in its main department store in Myeongdong in Seoul, and in its World Tower outlet. The duty-free retailer expects last year’s demand for whisky to continue far into 2023—and more so at the high end—and securing the Glenfiddich limited edition is a taste of things to come.

Discounting to build volumes

Yozakura translates as the appearance of cherry blossoms in full bloom under moonlight, and the product made its appearance at the right time of hanami, the cherry blossom festival. Earlier this month, Lotte also stocked the product on a first-come, first-served basis at its stores at Incheon International Airport.

To make sure of sales growth in the spirits segment, Lotte Duty Free is running discount events at its downtown stores. Until May 31, alcoholic beverages, including popular and upscale whiskies such as Ballantine’s 21 Years and Johnnie Walker Blue will be discounted by 20% on purchases of one bottle, and 30% for two or more bottles.

Lotte has launched other discount events in line with the increase in overseas travelers, although Korea Tourism Organization figures put these at well below 2019 numbers. The retailer aims to squeeze out extra spending per head from its promos such as the seasonal ‘Awakening Spring’ which includes international high-end brands such as Stuart Weitzman (shoes) that are being discounted by up to 80%.

While the Chinese will, very probably, become a mainstay of Lotte’s downtown duty-free business again, the retailer wants to cut its dependence on them. In a new report on the global duty-free market, research group Euromonitor International, stated: “The company aims to reduce its reliance on the Chinese market, which accounts for almost 80% of its sales, and focus its attention on southeast Asia, specifically Malaysia, Indonesia, Thailand and Vietnam.” Australia is also a target market in the region.

“Downtown duty-free shops were an important factor driving sales during the most restrictive Covid-19 period, especially via online channels,” said a spokesperson at Euromonitor. “With the pandemic largely over, the duty-free giant has been diversifying internationally.”