Seizing on a huge category opportunity
‘Building food into the #1 most purchased category in travel retail’: that’s the simple expression of a big ambition that Nestlé is bringing to the industry – and which is central to our latest Spotlight eZine edition. It is a timely call to action as travel recovers, and as airports, retailers and brand owners seek to make the offer relevant to an evolving consumer. Food and confectionery is already the number one driver of cross-category purchase and the second most purchased category, giving it a strong platform to build from. The goal is to leverage the currently untapped potential of food, ensuring it is in 50% of baskets by the end of the decade. Crucially, that means not just focusing on the traditional and highly attractive confectionery category, but also exploiting the opportunities across the food category, encompassing local foods alongside global food brands not yet widely present in travel retail.
Take this headline statistic: confectionery represents 77% of packaged food sales in travel retail, but just 7% in domestic markets. That’s a compelling difference, and an illustration of the under-developed potential of the food category in our channel.
Travel Retail Market
Confectionery as a percentage of packaged food sales, domestic and travel retail markets (Source: Euromonitor, Generation, 2019 sales)
How we get to one basket in two? The opportunity to reimagine the food category and the model to drive growth are the subject of this special publication. In the pages ahead we explain the background and rationale for Nestlé’s ‘Food: #1 most purchased’ strategy, the fresh opportunities available to recruit new shoppers, to grow basket size and to drive industry recovery. We present Nestlé’s VERSE growth model the pillars of which are: Value, Engagement, Regeneration, Sense of Place and Execution. Each one has a vital role to play in ensuring the ‘food in 50% of baskets’ target is met by 2030, if not before.
Stewart Dryburgh outlines the scale of the industry opportunity, and the key pillars of the VERSE model
Nestlé International Travel Retail General Manager Stewart Dryburgh says: “The crisis gave us the chance to stop and reflect, to ask ourselves some hard questions, and to reach some clear conclusions about the opportunities the food category offers our industry. Whilst COVID-19 has been devastating, we can see that the recovery is coming. That will bring with it a new market, with new consumer needs and we need to quickly adjust to exploit the opportunities.” In these pages we assess those opportunities for all parties to reimagine a new food category, and in doing so begin a vibrant new chapter in the travel retail story.
Dermot Davitt, President & Editorial Director, The Moodie Davitt Report