Nestle International Travel Retail made a bold assertion to double the confectionery and food sale upto US $10bn in 10 years. The announcement is based on a following major category research undertaken by the company.
At 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.
Facts and Figures
- In 2004, Dryburgh asserted that the confectionery category, then worth US$1.4bn could be doubled in five years.
- In the same year the industry valuation was $25bn by Generation, comparing to most recent figures now of $68.6bn.
- The travel retail industry has enjoyed monumental growth over the past 15 years. Much of that in-line with increases in passenger traffic, and the Asia Pacific travel explosion.
- 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.
“We knew then that there were huge, untapped opportunities for owners, we achieved that goal*,” he says. “If we all put our mind to it I know that we can do it again.”
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.