INTRODUCTION
A mission to double the category
“To kick-start a vigorous new growth curve” is the goal of Nestlé International Travel Retail (NITR)’s ambitious updated vision for confectionery & fine food sales in travel retail – in which it is inviting everyone involved in the category – brand owners, retailers and airports – to take part.
The ultimate goal? To deliver US$10 billion in confectionery & fine food sales in travel retail within ten years, which means reigniting category growth, engaging better with consumers, ensuring the offer is more relevant than ever, and taking a fresh look at the drivers of the business for today and tomorrow.
Importantly, while chocolate will remain critical, there is potential to further develop the offering in other food sectors that can contribute to this new wave of hoped-for growth.
By way of background, 15 years ago Nestlé International Travel Retail General Manager Stewart Dryburgh (who later moved to other senior group posts before returning to the role in 2016) asserted that the confectionery category, then worth US$1.4 billion, could be doubled in five years. [According to Generation, in 2010 confectionery sales reached US$2.8 billion. Together with fine foods, the category achieved sales of US$3.6 billion in that year -Ed.]
“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. If we all put our minds to it I know that we can do it again.”
Nestlé International Travel Retail General Manager Stewart Dryburgh
Dryburgh says: “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. If we all put our minds to it I know that we can do it again.”
The ten-year target period to double sales reflects the larger and more complex travel retail market in 2019. “In 2004 the industry was valued at US$25 billion by Generation, compared to most recent figures now of US$68.6 billion,” says 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 believe it is achievable within ten.”
It will also mean reinvigorating the category’s growth trajectory; although sales have grown in recent years the business has not been as dynamic as before.
Dryburgh says: “At NITR we 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 research conducted by m1nd-set, NITR 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.
Dryburgh says: “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.”
With the research findings, NITR developed a “fresh take” on the drivers that will grow the business, and crucially, the strategic initiatives required to achieve them.
The path ahead will involve collaboration between industry actors, from retailers to other brand owners and indeed airports. It will mean innovation and new product development. It will feature more excitement in how the channel speaks to consumers, and activations built around the NITR framework of SOUL (Stories, Occasions, Unique, Local).
“We can create the opportunities to kick-start a vigorous new growth curve for confectionery and fine foods,” says Dryburgh.
The Moodie Davitt Report is delighted to join NITR and the wider industry on this journey, and to outline the vision, strategy and key initiatives that will propel the industry towards ’10 in 10’.
Dermot Davitt, Editor
Spotlight Series
December 2019
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