Welcome to a new thought leadership column in partnership with Nestlé International Travel Retail that aims to raise the profile of food and highlight its potential as a key growth driver in the travel retail mix. Future columns will feature category-championing retailers from around the world. In this first column, Nestlé addresses how food addresses key consumer needs, plays a role in driving basket sizes across categories and can represent travel retail at its experiential, multi-sensorial best better than any other category.
Food & confectionery can play a big role as the ‘antidote to apathy’ among many travelling shoppers and its role should be reappraised and championed as a sales and experience driver.
That is among the key messages being delivered to industry partners by Nestlé International Travel Retail (NITR) as it strengthens its mission to make food the #1 most purchased category in travel retail. That message will be reinforced by a series of columns under the ‘Food Reimagined’ title that we begin in this eZine edition.
The strategy and key principles were eloquently outlined at the recent Trinity Forum by NITR Head of Category Development Nicola Wells.
She noted: “As an industry we have been grappling with spend and conversion decline even long before COVID-19. Travellers today want retail to be more experiential than transactional. In travel retail, food has been under-leveraged and under-prioritised, often fragmented and in less than optimal space, yet it provides a lot of answers to the questions that we face.”
Citing the positives, NITR says that food & confectionery offers the highest penetration growth rates in travel retail (H1 2023 figures from m1nd-set) and the highest conversion rates among Gen Z travellers. It is also the number one cross-category sales driver, has breadth of appeal across price points and delivers on multiple purchase occasions and need states, offers globally trusted brands, Sense of Place and sustainability credentials.
NITR’s VERSE (Value, Engagement, Regeneration, Sense of Place and Execution) growth model sits at the heart of its thinking about doubling the category in the decade ahead, and a reimagined food business playing a much greater role in retailers’ strategies.
What is crucial is that the target to make food the number one most purchased category in baskets, led by the VERSE model, is led by consumer needs. Brands have a role in signposting the category but ultimately this is about wider category strategy and indeed how retailers think about the total store.
That means taking a unified view of the category, which NITR neatly terms the ‘Emporium of Goodness’, reinforcing the messages that food can do good (be environmentally-conscious, promote social initiatives, be sustainably sourced); can be good (support healthy options, connect through communities, travel well) and can drive a feel-good factor (create experiences, make memories, be fun and add theatre to the store). In short, engaging with food in travel retail should be time well spent.
Wells noted that this is not a blueprint store design but rather a set of principles such as Food category is merchandised together (confectionery, non-confectionery and local) and comes last in flow. Local and Sense of Place is critical and the principle is to lead with local. Consumer need led approach is supported with cross category concepts such as gifting, health and wellness and sustainability with its own area, plus flexibility throughout so that newness and innovation can be added to keep the store fresh.
The conversation around food reimagined also extends to partnerships. For example, as Wells noted at Trinity, how does the industry reimagine contracts more flexibly so that different spaces attract different rent rates and help drive volume, as food does so well? The inflexibility of contracts can also mean innovation is squeezed out for the tried and tested, says NITR.
“We have to look across the whole customer journey, not just at the boundaries of each category. Can we stretch those boundaries of activity for every category? Here, food can take a lead and play a part beyond the confines of the store. Consumers don’t think like this and nor should we.”
The overall approach promoted by one of the sector’s leading brand owners suggests a basic reappraisal of food and how it can be championed as a driver of growth. Adopt the key principles and think of Food as a priority category, says NITR, and a brighter future for the wider industry awaits. ✈
*Note: This article first appeared in The Moodie Davitt eZine. Click here for that version.
