Confectionery and fine food sales in travel retail can double to US$10 billion in ten years, according to Nestlé International Travel Retail (NITR). General Manager Stewart Dryburgh today released details of the company’s updated vision for the category, following a major research project.
Speaking to delegates at the ACI Commercial and Retail Conference in Reykjavik (which The Moodie Davitt Report is attending this week), Dryburgh said: “This ground-breaking research provides a platform for everyone involved in the category: brand owners, retailers and airports. We look forward to bringing this to life with our retail partners and reigniting category growth.”
Based on the findings, NITR said it has developed “a fresh take” of the drivers that are necessary to drive the confectionery and fine food category. Used in conjunction with NITR’s SOUL (Stories, Occasions, Unique, Local) framework, Dryburgh said: “We can create the opportunities to kick-start a vigorous new growth curve for confectionery and fine foods.”
While chocolate will remain critical, Dryburgh said there is also significant potential to further develop the offering in other food sectors. “Within the Nestlé group we have a number of brands that we’re now looking at within this context,” he said.
Previously, in 2004, Dryburgh asserted that the confectionery category, then worth US$1.4 billion, could be doubled in five years. “We knew then that there were huge, untapped opportunities for confectionery in travel retail and, thanks to the support from retailers and other brand owners, we achieved that goal*,” he says. “If we all put our minds to it I know that we can do it again.”
The ten-year period given to double sales reflects the larger and more complex travel retail market in 2019, he noted. “In 2004 the industry was valued at US$25 billion by Generation, compared to most recent figures now of US$68.6 billion,” continued Dryburgh.
“The travel retail industry has enjoyed monumental growth over the past 15 years – much of that in line with increases in passenger traffic and, of course, the Asia Pacific travel explosion. Given the size, diversity and challenges of the market now, it will be a challenge – but we do believe it is achievable within ten.”
He added: “While the confectionery and fine foods category has enjoyed dynamic growth and ahead of passenger traffic in the past, that has not been the case in more recent years.
“At NITR we’ve stopped and asked ourselves: Why is this? What’s changed? But most importantly, what are we going to do about it? How are we going to reignite the growth of this exciting category?”
Based on the research, conducted by m1nd-set, NITR has identified three key purchasing motivators, each with their own individual set of reasons to buy:
*’Elevated Experiences’ including elements described as Travel Souvenir, Give Me a Boost and Experience & Indulge;
*Deeper Connections: including All Year Round Gifting, Share and Connect, Celebrate the Seasons and Uplifting Breaks;
*Better for You: including Health Snacks, Better Treats and Happy Parents-Happy Kids.
“These findings show that there are untapped motivations for us to leverage and under-exploited need states for us to commercialise. We can provide shoppers and consumers with more of what they want. As ever it will be critical to deliver these offerings in context with the commercial strategies of our retail partners,” Dryburgh concluded.
* In 2010 confectionery sales reached US$2.8 billion according to Generation and was the third largest product sector after women’s cosmetics and women’s fragrances. Together with fine foods, the category achieved sales of US$3.6 billion in that year.