Japanese Whisky Explodes in Duty Free While Cognac Posts One of Its Worst Years in Decades
The airport duty free shop has long been a battlefield for the world's premium spirits brands — a place where travelers loosen their wallets, check their watches at the gate, and grab a bottle of something they wouldn't ordinarily splurge on back home. For decades, two categories owned that floor space: Scotch whisky and Cognac. But the latest hard data out of global travel retail tells a dramatically different story, one that would have been almost unimaginable just a few years ago. Japanese whisky has stormed the airport concourse in a way that no other spirits category has managed in recent memory, while Cognac — once the undisputed king of the duty free gift bag — is weathering a crisis of historic proportions.
Japanese whisky was global travel retail's standout category in 2025, while Cognac "suffered one of its worst declines in several decades." Those are not the words of a breathless enthusiast blog. They come from IWSR, the London-based data and analytics firm whose figures underpin the entire drinks industry's strategic planning. When IWSR uses language like that, the industry listens — and then starts making calls about where to put its money next.
The Big Picture: GTR Spirits in 2025
Before drilling into the winners and losers, it's worth understanding the broader context. Data from IWSR revealed spirits volumes rose by 6% in 2025 while value increased by 7%, with whisky serving as the growth driver for global travel retail, posting a 12% value gain for the year. That is a strong overall performance for the channel, especially given the headwinds the industry has been navigating — rising fuel costs, Middle Eastern airspace disruptions, and persistent cost-of-living pressures squeezing discretionary spending in key Western markets.
Spirits and wine both posted value increases in 2025 — up 7% and 5% respectively — and all four regions covered by IWSR recorded value growth, led by Europe and Africa/Middle East, both up 11%, followed by the Americas at 7% and Asia-Pacific at 2%. The European and African/Middle Eastern regions outperforming Asia-Pacific is a notable shift, given how thoroughly Asian travelers — particularly those from China — have historically driven duty free spirits revenue.
This masks pronounced regional variations, including a lacklustre spirits performance in Asia-Pacific despite continued strong growth in India, and in the Americas, a split between a buoyant Latin America and a softer North America. For American enthusiasts following global spirits trends, that softness on home turf is worth noting. The post-pandemic surge in premium spirits spending stateside appears to be settling into more measured territory, while the real action is happening in airport terminals from Frankfurt to Dubai to Singapore.
Japanese Whisky: A 44% Value Surge That Rewrites the Playbook
IWSR called Japanese whisky the "standout" of all categories in global travel retail for 2025, with 44% value growth and volumes up by 37%. To put those figures in perspective: the category didn't just outperform its nearest whisky rivals — it lapped them. By a wide margin. Scotch and American whiskey both posted 10% value gains, while Irish whiskey rose by 11%. Solid numbers for any category. Against Japanese whisky's 44%, they look modest.
Addressing Japanese whisky's boom, Charlotte Reid, IWSR senior insights manager GTR, said: "Growth was driven by strong cultural cachet, traveller curiosity and a genuine willingness by consumers to spend at or above the premium tier." That last part — willingness to spend at or above the premium tier — is the crux of it. Japanese whisky is not winning on price. It is winning because travelers actively seek it out, treat it as a discovery purchase, and are prepared to pay for the experience. That is the holy grail of duty free retailing, and Japanese whisky has cracked it.
What's Driving the Demand
The cultural machinery behind Japanese whisky's global ascent has been building for years, but in the duty free environment it has reached something like critical mass. The airport is, in many ways, the perfect venue for the category. A traveler passing through Narita or Haneda on their way home is a highly motivated buyer. But so, increasingly, is the American or European traveler connecting through Singapore or Seoul who has spent the last decade watching Yamazaki and Nikka win awards and command auction prices that rival the most sought-after Scotch single malts.
Exports in 2023 had already risen to 12.9 million liters globally from 2.7 million liters in 2013, indicating sustained global demand over a decade. That near-fivefold export increase over ten years reflects not a flash-in-the-pan trend but a fundamental repositioning of Japanese whisky as a globally elite category. The strong demand is especially evident in the U.S. market — 5.7 million liters imported in 2024, with single malt whisky capturing 63% share. American drinkers, in other words, are not just curious about Japanese whisky. They have developed a clear preference within it — skewing heavily toward single malt expressions, the same tier that commands the highest prices and the most collector interest.
Rare bottlings and aged expressions increasingly fuel demand, reinforcing Japanese whisky's reputation as a high-end, collectible and export-oriented product. For anyone who has browsed duty free shelves in a major Asian hub in recent years, this tracks. The shelf space given over to age-stated Nikka, Hibiki, and Yamazaki expressions has grown visibly, and the price points being asked — and met — would have seemed outrageous a decade ago.
The Market Trajectory
The global Japanese whisky market, valued at approximately USD 982 million in 2025, is expected to climb to nearly USD 1.98 billion by 2034 at a CAGR of 8.1%. That projection, if it holds, would make Japanese whisky one of the fastest-compounding premium spirits categories on earth over the next decade. Growth drivers include aged whisky demand up 80%, U.S. imports up 50%, and limited-edition whisky sales up 300%. The limited-edition figure is particularly telling in the context of travel retail, where exclusive and travel-retail-only expressions have become one of the most effective ways to drive premium purchases at the point of departure.
According to Serdal Ersoy, Sales Director, Asia Pacific, Middle East and Global Travel Retail at Yoshino Spirits, Japanese whisky continues to attract strong consumer interest for both personal consumption and gifting, driving steady growth in Asia's travel retail sector. That dual-purpose appeal — equally strong as a self-indulgence and as a gift — gives Japanese whisky an advantage that many other premium categories struggle to replicate in the duty free environment. Cognac, as it turns out, has been far more dependent on just one of those two pillars — gifting — and that over-reliance is now at the core of its crisis.
The Cognac Collapse: Trade Wars, Shifting Habits, and a Gifting Culture Under Pressure
If the Japanese whisky story is one of ascent, the Cognac narrative in 2025 is a cautionary tale about category concentration, geopolitical exposure, and the dangers of building an entire commercial model around a single consumer ritual. Charlotte Reid of IWSR explained that "in global travel retail, traditional spirits categories are being challenged by rapid shifts in consumer preferences," noting that while spirits delivered aggregate volume growth of 6% and value growth of 7% in 2025, "Japanese whisky and agave spirits surged, while Cognac suffered one of its worst declines in several decades."
Data from the Bureau National Interprofessionnel du Cognac (BNIC) showed that global shipments fell 15.1% year-on-year to 141 million bottles, while total sales dropped 25.3% to €2.24 billion (approximately $2.6 billion). Those are not rounding-error declines. A 25% revenue drop in a single year would qualify as a crisis in any consumer category. In one as capital-intensive and aged-inventory-dependent as Cognac, where houses must commit to production years before they know market conditions, the damage compounds.
All major quality tiers recorded declines: VS fell 16.2%, VSOP dropped 11.5%, and XO and above saw the steepest contraction, down 23.2%, underscoring pressure across both entry-level and premium segments. The collapse at the XO tier is particularly significant for the duty free context, because it was precisely the high-end, prestige-gift segment where Cognac had dominated airport retail for generations.
China's Role: Anti-Dumping Duties and a Market Closed Off
The proximate cause of Cognac's 2025 catastrophe traces back to the corridors of trade policy, not consumer taste. The duty free Cognac business faced an incredibly challenging environment, having effectively been shut out from its largest travel retail market, China, since December 2024. In January of the prior year, the Chinese Ministry of Commerce launched an investigation into whether EU-made brandies were being sold in the Chinese domestic market at artificially low prices — a move widely perceived in the West as part of a broader dispute over tariffs on Chinese electric vehicles.
The investigation broadened as the year went on, and in December 2024, duty free retailers were prevented from resupplying their stores with Cognac — their most profitable international spirit category. The impact was sizeable, as duty free accounts for 20% of the entire Cognac business in China, according to the BNIC. Losing 20% of your China business overnight, in a category where China is by far the most important market, is the kind of shock that reshapes corporate forecasts for years.
In July 2025, China imposed anti-dumping duties averaging 32.2% on imported Cognac, following an 18-month investigation during which industry sales in China dropped by roughly 25%. A 32% tariff wall on top of an already weakened consumer environment meant the path back to pre-2024 volume levels became considerably longer and more uncertain. After China launched its investigation into EU brandy in 2024, some distributors had accelerated purchases, temporarily inflating import volumes but leaving the market oversupplied. The resulting inventory hangover has been one of the more painful structural problems the Cognac houses have had to manage.
The Premium Gifting Problem
Beyond geopolitics, Cognac is grappling with a more fundamental structural problem: its commercial model in travel retail was built almost entirely around gifting, and that gifting culture — particularly in the Chinese market — is weakening. Reid noted that "the premium XO segment was hit hardest in 2025, as traditional gifting occasions weakened, but VS benefitted from growing use in cocktails," adding that "recovery will depend on engaging travellers through experiential retail, accessible entry-level expressions and repositioning beyond gifting into self-purchase and on-trip consumption occasions."
That is a significant strategic pivot to ask of a category whose entire marketing architecture — the presentation boxes, the prestige-position shelf placement, the price anchoring at multiples of domestic retail — has been engineered for the gift occasion. Repositioning toward self-purchase and cocktail consumption requires a different kind of storytelling, different product formats, and a different relationship with the retailer. It is doable. But it is not fast, and in the meantime, the shelf space Cognac once commanded is available for categories that have already figured out how to speak to the self-purchasing, curious traveler.
Agave Spirits: The Other Big Winner Nobody Is Surprised About
Another strong performer in GTR was agave spirits, which recorded a 10% volume gain and a 28% value rise. That divergence between volume and value growth — 10 points of spread — indicates the same premiumization dynamic driving Japanese whisky: consumers are buying less by the bottle count but spending more per bottle. Tequila and mezcal have undergone the same cultural rehabilitation in airports that they completed in upscale American bars several years ago. The traveler who wouldn't have been caught dead buying Tequila at duty free a decade ago is now reaching for an añejo or an artisanal mezcal as confidently as they'd pick up a single malt.
In category terms, agave spirits and "alternative" whisky origins — Japanese, Indian, Irish, and others — are making inroads into Scotch's historic dominance of the GTR channel. That structural shift has been underway for years, but 2025 appears to represent the year it became undeniable in the IWSR data. Scotch remains a formidable category, and its 10% value growth is nothing to dismiss. But its share of the conversation — and likely of the premium shelf — is being contested in ways it hasn't been since duty free spirits became a serious business.
Irish Whiskey, Vodka, Gin, and Rum: The Rest of the Field
Irish Whiskey Finds Its Footing
Reid noted that "Irish whiskey is also experiencing broad momentum, supported by a growing number of new distilleries successfully gaining traction with curious travellers." Ireland's whiskey renaissance — which has seen the number of active distilleries on the island go from single digits to well over forty in less than fifteen years — is now producing commercial results in the channel most valuable to the premium spirits industry. The progress of Proximo Spirits-owned Bushmills single malt is typical of a growing sector enjoying significant success, with the company's head of GTR, Roy Summers, stating that "our Bushmills Irish whiskey business has been going great guns."
Vodka: Flavored Variants Pull Weight
Boosted by flavored products, vodka saw an increase of 7% in volume and a double-digit value gain. The story inside the vodka numbers is a familiar premiumization tale. Vodka remains by far the largest white spirits category in duty free, and while overall sales remained relatively flat in 2024, the premium-plus price tier proved the spirit's fastest-growing subsector, outperforming flavored styles. In 2025, flavored expressions drove the volume numbers while premium lines carried value. Both ends of the category found their audience.
Gin Stalls, Rum Trades Up
Gin was flat in volume terms but grew 7% in value, driven by craft and local products in Nordic countries, the UK, and Asia Pacific, while flavored gin decreased as consumers shifted to vodka and ready-to-drink products. The flavored gin boom that defined travel retail's spirits shelves in the late 2010s is clearly in retreat. The category is not dead — craft and regional products continue to find engaged buyers — but the era of every new fruit-forward gin expression commanding premium shelf real estate appears to be ending.
Rum volumes fell 6%, but value increased, suggesting the category is benefiting from drinkers trading up, led by dark variants. That pattern — declining volume paired with rising value — is actually a healthy sign for a category that has long been undersold on price relative to its quality potential. Dark rum's moment in premium spirits culture has been building for years, and the duty free data suggests it is starting to translate into higher average transaction values.
The Road Ahead: Headwinds, Premiumization Ceilings, and the Fight for Shelf Space
For its 2025–27 forecasts, IWSR notes that the industry faces "significant challenges," including the Middle East conflict, airspace closures, flight disruption, fuel costs, and cost-of-living pressures. Those macro factors are not going to resolve themselves quickly, and their uneven geographic impact — the Middle East routes hit harder than transatlantic ones, for example — will continue to create regional winners and losers within the overall GTR performance.
The super-premium tier stood out in 2025 with a 10% increase, but IWSR pointed to a "ceiling" for premiumization in GTR, with both ultra-premium and prestige tiers declining. That ceiling is a critical data point for brand owners investing heavily in exclusive, prestige-positioned GTR expressions. There is clearly a price point beyond which even motivated duty free buyers balk — and 2025 appears to have clarified where that ceiling sits in the current consumer environment.
IWSR projects Scotch whisky as the biggest incremental value opportunity in GTR spirits leading to 2030, ahead of agave spirits, gin, and Japanese whisky. IWSR projects Scotch to see a retail sales value gain of more than US$400 million over that period — a reminder that the incumbent categories have scale advantages that newer challengers cannot replicate overnight. Japanese whisky can post extraordinary percentage growth precisely because it is building from a smaller base. As it matures and occupies more shelf space, those growth rates will moderate. The question is whether the category builds the brand infrastructure and supply depth to sustain meaningful volume at scale, or whether it remains a premium, scarcity-driven niche — spectacular in percentage terms, but limited in absolute contribution to the channel.
There is a growing polarisation in traveler spending, with consumers either trading up to prestige and prestige-plus tiers or seeking strong value at standard and entry-level price points — a trend that was persistently observed throughout the most recent research cycle and is expected to persist over the coming years. For brands stuck in the middle — offering mid-priced expressions that are neither aspirational enough to justify premium spending nor priced aggressively enough to capture the value-seeking buyer — 2025 was a difficult year. That barbell spending dynamic is, if anything, the most important structural force reshaping how spirits are sold in the world's airports right now.
What It All Means for the American Whiskey Drinker
For the American enthusiast who drinks broadly across categories — and whose airport ritual might involve scanning the bourbon shelf for a travel exclusive before eyeing the Japanese whisky section — the 2025 GTR data has a few direct implications. American whiskey posted a solid 10% value gain, keeping pace with Scotch and outrunning almost every non-whisky category. That performance reflects continued global appetite for the category, even as bourbon's domestic hype cycle has cooled somewhat from its peak frenzy years.
While Scotch and Cognac have traditionally dominated the brown spirits landscape in global travel retail, there is now a clear shift underway, as whiskeys of all origins, Cognac, rums, and tequilas compete for what has long been the mainstay of spirits trading in the channel — and other categories are making inroads as consumers increasingly demand more choice. For the traveling American drinker, that means more variety, more discovery potential, and a duty free floor that looks genuinely different from what it did five years ago.
The Japanese whisky shelf in a major international airport is no longer an afterthought tucked between Irish cream and flavored vodka. It is a destination, stocked with age-stated expressions and travel-exclusive bottlings priced at hundreds of dollars, and travelers are buying them. That is not a bubble metric — it is a reflection of a category that has done the hard work of building genuine credibility over two decades, and is now collecting its reward in one of the most competitive retail environments in the world. Whether it can sustain 44% value growth as it scales is the question every Cognac house, Scotch producer, and American whiskey brand will be watching very carefully — because wherever Japanese whisky's share grows, something else is giving up ground.
