Sustainability in Travel Retail
Treading a path to sustainable recovery in travel retail
Amid the most challenging period the industry has faced, what role does sustainability play, and where does corporate responsibility and concerns about the future of the planet fit when many companies are battling for their survival? How should players in the travel retail eco-system join forces to drive a sustainable future, we ask in this report? We begin on this page with a round table of leading retailers that have long championed sustainability as core values, followed by selected examples of activity undertaken by brand owners around the world. By Dermot Davitt and Hannah Tan-Gillies.
Today, perhaps more than ever, the aviation, travel, tourism and travel retail industries need to demonstrate that they can be catalysts for positive, sustainable change on the world around us. At a time when travel has all but halted, and its role in economy and society is even being questioned by some, our industry must underscore – and positively communicate – its deep commitment to communities, to consumers and to the wider world. It is not an easy balancing act, one acknowledged by those we spoke to for this special feature on sustainability in the channel. How do we maintain the traditional face-to-face nature of our business while reducing carbon footprint? How do better manage supply chains while shipping products around the world? And how do we respond to consumer demand for sustainable packaging and use of materials? In short, how does travel retail as a channel prove itself a good corporate citizen? We ask leading travel retailers Gebr Heinemann, Lagardère Travel Retail, ARI and Ever Rich Duty Free for their views on these questions, and talk to them about their own approaches and initiatives. In the pages ahead we also feature the activities of brand owners that are championing sustainability in their own companies and categories.
How should travel and travel retail come together as an eco-system to drive greater sustainability in the industry?
This is a key question for the future of our channel, a future that can only be delivered through collaboration. Gebr Heinemann has placed sustainability at the heart of its value system for many years, and invested in many projects that match those values. Director Corporate Affairs and Compliance Dr. Jennifer Cords says: “‘Eco-system’ is exactly the right term when talking about how travel and travel retail can join their forces. Travel retail is part of the travel value chain and part of the aviation system – and not ‘non’-aviation as it is often referred to in terms of revenue streams. Anything that affects travel and aviation has an impact on travel retail and vice versa. “To drive greater sustainability in this interdependent system it is crucial to promote and support responsible consumption and travelling in an aligned way. Intensive stakeholder dialogue – either directly or via our industry associations – is the key, to promote and benefit from joint efforts.”
Dr. Jennifer Cords: Supporting responsible consumption in an aligned way
Lagardère Travel Retail is another company with responsibility at its core. In 2019 it launched PEPS (Planet.Ethics.People.Social), a four-pillar, results-driven CSR strategy that today is at the heart of its decision-making. Of how the industry can come together, Executive Vice President Foodservice & CSR Mélanie Guilldou says: “Retail only plays a small part in the overall eco-footprint of the travel industry. Yet it is important that travel retailers and landlords work collaboratively to advance the sustainability of the eco-system, in particular by improving contract duration (if these are too short, we can’t fully amortise equipment), waste management and recycling, logistics, energy management etc. Very importantly, we also must build and convey a common vision around sustainability which will reinforce the commitment of all parties in our eco-system to shape a more responsible future for our industry.”
Joining hands to protecting the planet: Lagardère Travel Retail places CSR at the heart of its decision making
Ever Rich Duty Free has long placed CSR at the heart of its value system. President Kevin Chiang says: “The tourism retail industry not only provides sales services, but also plays an important role as a bridge in connecting the local with the global. Therefore corporate social responsibility practices should be broadened to take in a global scope. Ever Rich participates in various international activities and actively adopts new international standards to establish a sustainable enterprise that is in line with the world trend. “Moreover, retailers should share the same social values and support local community, work together with local firms, smallholders and artists. When shopping becomes a support to local [activities], it becomes a positive cycle that drives greater sustainability. That is also the reason that Ever Rich has been promoting Taiwanese art and culture, working with local farmers and local industry to create representative Taiwanese products.”
Kevin Chiang: Supporting local to create a virtuous cycle of activity
Aer Rianta International (ARI) Chief Operations & Business Development Officer Nuno Amaral says the company’s status as part of an airports group (DAA) gives it a holistic view of the industry eco-system and airport priorities. “Traditionally, travel retail initiatives were typically driven by airports with retailers focusing on mainly environmental aspects of sustainability (like reduction in single use plastics). In the future, travel retailers will also need to drive their own agenda, be it in new store developments, engagement with brands and supply chain operators, or engagement with communities. “At ARI sustainability will be the foundation of any new store development, and we have an excellent example in our new store at Abu Dhabi’s Midfield Terminal, which is built with advanced environmentally friendly practices, meeting the ‘Estidama’ standards. Abu Dhabi sets the ambition for the ecological build of new store builds and refurbishments at ARI. “ARI is engaged with brands across all categories, working with suppliers to increase our green offer, reduce the amount of waste generated in the supply chain, and reduce the carbon footprint.”
Nuno Amaral: Travel retailers must drive their own agenda within the eco-system
‘Plane Water’: Bottles available at The Loop, Dubin Airport are now made from 100% recycled materials
Does this become more difficult in the COVID-19 era and beyond?
In the times that we live in, does living and breathing sustainability values become more challenging however? As a channel embedded in the wider travel economy, one whose future is anything but certain, it’s not easy to look away from short-term goals. Mélanie Guilldou says: “The crisis certainly hasn’t eased progress towards sustainability. Many of us have been busy managing the short-term impact of the global pandemic, and the increased use of disposables and protective equipment has hampered efforts to reduce waste. We have also found that CSR is not always as high on landlords’ agendas as it should have been.”
Despite the crisis, travel retail must redouble its sustainability efforts and show consumers its commitment
For Lagardère Travel Retail, despite the crisis a focus on CSR remains “critical,” she notes. “Sustainability is at the top of consumers’ expectations and only companies which can demonstrate their commitment and progress towards building a more sustainable future will secure long-term success.” Building on the theme, Jennifer Cords says that acting responsibly in times of crisis is more important than ever. “The exchange with our business partners and suppliers as well as the commitment of our colleagues around the globe have encouraged us to continue our journey towards more responsibility in the travel industry.” ARI’s findings reinforce this view, with an emphasis on sustainability having “accelerated” through the pandemic. Nuno Amaral says: “Consumers want it now more than ever before [82% consider sustainability when making a purchase; source Pi Insights 2020]. The challenge is to balance the current turbulent trading environment with customer expectations, both now and in the future. “In my role as Chief Operations & Business Development Officer, coupled with Executive sponsor of Sustainability, I am accountable for both the delivery of the business results and of our sustainability strategy. I am 100% focused on and committed to leading the team to achieve this balance and drive the sustainability agenda across our estate at speed.”
How does travel retail bring together profit and purpose?
On this question, travel retailers we spoke to are emphatic – you can be ‘green’ and still make money. And with consumers today demanding that you show your credentials as a responsible corporate citizen, investments in sustainability are no longer ‘nice to haves’ but ‘must haves’. Nuno Amaral says: “Sustainability is fast becoming almost a ‘hygiene’ factor. Notwithstanding the fact that it might come as an additional cost to the business in some areas, there will be a time in the future when the industry no longer challenges this investment. Other industries are more advanced than travel retail in this space and they have realised that their stakeholders, whether customers, shareholders or partners, demand a focus on sustainability to remain relevant in the future. “Creating a ‘conscious shopping’ experience is a major component of our customer value proposition and is a strategic priority for ARI. Airports and customers have high demands for a ‘greener’ retail operation. We must not lose sight of the fact that we operate in a competitive B2B environment and that sustainability is becoming a major focus for airports. We need to be able to increase our sales and deliver sustainable profits. We believe our sustainability strategy will achieve both in the long term.”
Mélanie Guilldou: “It’s better to excel where you can make the greatest difference than be average everywhere”
Mélanie Guilldou says the balance is possible: showing one’s green credentials – through the product offer or by reducing waste or energy – can make it more appealing to shoppers and boost the bottom line, she insists. “Sometimes it can be more difficult, and significant investment is required to deliver longer term sustainability (and profitability) gains. To avoid a detrimental impact on the industry economics, the environmental and economic benefits must be carefully assessed and balanced, and priorities must be defined. It’s always better to excel where you can make the greatest difference than be average everywhere.” For Gebr Heinemann, aligning the four Ps – people, planet, profit and purpose – is the overriding goal. That means measures that contribute to company and industry performance mirroring those that offer a safe, healthy future for people and the environment. Jennifer Cords says: “Some examples that bring together profit and purpose: Saving natural resources in retail design, packaging and our offices saves environmental resources but it also saves money. Sustainable products create awareness for the topic among customers and are so sought-after that they can gain up to +50% more revenue. Investments and partnerships in sustainability are focusing on the long term.” Kevin Chiang concludes with a message that should resonate across the industry. “A sustainable enterprise should not only seek profit; how you spend your money is equally as important as how you generate it,” he says. “The process of pursuing sustainability is actually the same direction as helping society develop towards goodness, delivering kindness through action.” *See next page for examples of how these retailers are putting principles into profitable action.
Ever Rich partners with local artists and artisans with a view to maintaining short supply chains while boosting business
The Moodie Davitt eZine Issue 292 | 15 March 2021
The Moodie Davitt eZine is published 15 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail firstname.lastname@example.org