$10bn in 10 years

Nestle ITR announces new grand plan for confectionery and fine food sales in global travel retail

Confectionery and fine food sales in travel retail can be doubled to US$10bn in 10 years. That is the bold assertion made by Nestle International Travel Retail following major category research undertaken by the company. 

Speaking to delegates at this week’s ACI Commercial and Retail Conference in Reykjavik, Iceland, NITR general manager Stewart 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 research findings, NITR says it has a fresh take of the drivers that are necessary to rejuvenate the confectionery and fine food category.  Used in conjunction with NITR’s SOUL framework (Stories, Occasions, Unique, Local), Dryburgh believes: “We can create the opportunities to kick-start a vigorous new growth curve for confectionery and fine foods.”  While chocolate will remain at the core of the sector, Dryburgh believes 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 says.

It’s not the first time that NITR has thrown down the gauntlet to double this industry sector.  In 2004, Dryburgh asserted that the confectionery category, then worth US$1.4bn 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 mind to it I know that we can do it again.”

The ten-year period given to double sales reflects the much larger and more complex travel retail market in 2019. “In 2004 the industry was valued at $25bn by Generation, compared to most recent figures now of $68.6bn,” continues 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.”

“Whilst the confectionery and fine foods category has enjoyed truly dynamic growth and ahead of passenger traffic in the past, that has not been the case in more recent years,” explains Dryburgh. “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 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 commercialize. 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 concludes.

* In 2010 confectionery sales reached $2.8bn according to Generation and was the third largest product subsector after women’s cosmetics and women’s fragrances.  Together with fine foods, the category achieved sales of $3.6bn.