Guilt-free options and the key to hyperlocalization for travel retail food companies

The travel retail market has been one of the hardest hit sectors by the COVID-19 pandemic over the past couple of years due to various border closures and travel bans implemented in the world, but in recent months, the APAC industry has reported a healthy recovery across the board. when regional and international borders began to open up, including for food and drink.

“International Air Transport Association (IATA) figures for February this year showed good reason for optimism [with] global traffic having recovered more than half of its pre-pandemic level at minus 45.5% compared to February 2019”,Tax Free World Association (TFWA) President Erik Juul-Mortensen said at the recent TFWA Asia Pacific Live event in Singapore.

“The list of countries in the region that will open to vaccinated travelers in 2022 includes Australia, India, Indonesia, Malaysia, New Zealand, Singapore, South Korea and Vietnam, and d Others may well join them in the coming months. [Travel retail] and duty-free sales are also rebounding at a very encouraging pace for an industry that until recently faced an existential threat from the impact of COVID-19.

In the travel retail market, alcohol and chocolate brands have always been among the most important sectors, particularly when it comes to duty-free sales at airports – but to not only continue this success, but also to to expand beyond current achievements, there is a need for even the most prominent brands to keep up with the current trends that are driving the wider F&B industry.

“The 2020s are essentially a strategic inflection point for all businesses today, a time that will make or break businesses, regardless of their size or success before it,”Innovators Institute founding president Charlie Ang said at the event.

“This is what we call the age of fusion, where we are in the midst of a shift from previous megatrends driving global development such as urbanization and globalization to new megatrends such as the fourth industrial revolution, climate emergencies, geopolitical unrest and rapidly aging societies converging and merging to produce a perfect storm, a whole new era of development.

“So for companies to make sure they succeed instead of fail, [in a sector such as travel retail] it is very important to grow based on the trends that drive consumer purchases [even in the wider market].

“In [food and beverage for example]many consumers are now attracted to guilt-free shopping, which means they want products that are low in fat or sugar, with an increased focus on health and wellness – This is an example of the how manufacturers can create new value for consumers, and at the same time, and the same goes for making products for travel retail.

“At the same time, guilt-free also means allowing consumers to buy and enjoy products without feeling guilty about harming the environment, so the focus would be on creating more energy-efficient products. and carbon, with a lower carbon footprint.

In this sense, Ang pointed out that since the COVID-19 pandemic hit, consumers are increasingly prioritizing regionalized production, which means making products with ingredients and production sites that are as close as possible. as possible from the retail site.

“Beyond localization, hyperlocalization has become a major focus in order to keep the supply chain as short and sustainable as possible,”said Eng.

“Apart from the sustainable aspect, COVID-19 has also made consumers aware of the importance of short circuits in terms of access to food products. [and food security] in general.

“So food brands that are able to make products for the same price that consumers can eat without guilt [either from a nutritional sense] or produced through the most hyper-localized supply chain possible are those most likely to succeed in the 2020s, both in travel retail and beyond.

Technology as the main driver

In addition, Ang believes that technology will be the main driver of this decade, as it has now become a “fundamental” element of business growth, as opposed to an “emerging” element that was “nice to have” as it is. was 10 years ago.

“It should be noted that we are basically at the end of the third industrial revolution and the beginning of the fourth, so somewhere in between, and we are going to see more and more fusion of technology in all aspects of the life and business. , through 4.0 technology stacks that can cover cognitive (AI and machine learning to mimic human thinking), trust (blockchain and crypto) as well as immersive (virtual reality, holography),”he said.

“The merging of technology into almost all kinds of operations means that the lines are blurring very clearly between the physical, digital and biological spheres when it comes to almost every industry in the world – each of them is about to be disrupted by technology. , including food and beverage production and innovation for every type of market.

“This paradigm shift essentially means that food companies will need to make this digital shift proactively in order to reduce their risk of being fatally disrupted – or risk becoming the next Blockbusters of today.”

Christy J. Olson