Duty-free liquor holds immense growth prospects

The global airport duty-free liquor market size was valued at $6.15 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 10.4% from 2022 to 2028. The market growth can be credited to the rising number of travellers at airports, where liquors are excluded from government taxes and duties, so the passengers prefer to buy them at economical rates. Additionally, before leaving for their home countries they choose to spend the surplus foreign currency to buy liquor from duty-free shops. All these factors are expected to boost market growth over the forecast period.The supply chain of the market was slightly disrupted during the Covid-19 era. The distribution channels in airports such as liquor stores, grocery shops, and supermarkets were hampered due to the lockdown imposed by several governments across the globe.

Moreover, government regulations play an integral part in the growth of the market. Various nations have their own regulations and rules for duty-free shops. For instance, the Indian government allows international travellers to buy two litres or two bottles of alcohol. Additionally, airport duty-free shops are favorite spots for buying things for some people before travelling abroad. This is owing to the exclusions of local import duties or taxes by the local governing bodies.

The rising demand for the striking flavors of beers to aid the digestive system is the key factor motivating the industry's growth. Along with that, the demand for artisanal spirits in emerging economies such as China and India is anticipated to propel market growth. Growing demand to procure value-added hard seltzer products at an affordable cost is expected to present a growth opportunity for the market. However, the rising inclination to consume non-alcoholic beverages is hindering market growth.

Increasing investment from the UK-based primary players to procure high-quality Scotch whisky products is refueling the market growth. The key players are acquiring superior quality cider, perry, and rice wine. Promptly growing demand for lower calorie-based beer supplements from U.S. consumers is driving the alcoholic industry, which is further propelling the market growth.The other segments that dominated the market captured a revenue share of over 85.0% in 2021. The others type segment consists of wines, beers, gin, vodka, and cognac.

Whiskey segment is expected to expand at the highest CAGR of 10.5% from 2022 to 2028. This can be credited to the rising demand for premium brands in developed economies of Europe. Premium whiskey is gaining popularity in the U.S. to fulfill the demand for flavored alcoholic beverages. Additionally, the demand for whiskey is expected to boom over the forecast period as whiskey is premium and known for its superior quality.

Asia Pacific accounted for the largest share of more than 45.0% in 2021. The majority of passengers from developing countries spend on liquor as it is available at economical rates at airports. Rising disposable income and improvement in economic conditions in developing countries are also important factors for the growth of this market. Increasing travel and tourism in this region owing to a larger millennial population, who are willing to spend on leisure tourism and exploration, will further drive the market.