November 24 2023  |  Confectionery & Fine Foods

Category growth and cross-category penetration top Nestlé's agenda

By Laura Shirk

Nestlé Sustainably Sourced Cocoa is made from 100% sustainably sourced cocoa through the company’s Nestlé Cocoa Plan

At this year’s TFWA Cannes World Exhibition & Conference in October, Nestlé revealed key initiatives to further drive its ambition to make food the number one most purchased category in travel retail. The company launched significant brand and category initiatives within its VERSE model (Value, Engagement, Regeneration, Sustainability, Execution) including eight channel-exclusive products, as it strives “to accelerate industry growth by tapping into unmet consumer needs within the vast opportunity offered by the wider food category.”

Ahead of the annual show, Stewart Dryburgh, General Manager at Nestlé International Travel Retail (NITR) said, “We are delighted to report that m1nd-set research for H1 2023 shows that the purchase penetration of food – including confectionery – has increased from 30% to 35% of duty free buyers. This is the fastest growth of any category. Critically, we are seeing this growth from both confectionery and non-confectionery with additional sales being incremental; in other words, with zero cannibalization.”

He also pointed out that while confectionery continues to be “the beating heart of food,” it is the non-confectionery sector – including vitamins, minerals and health supplements (VMHS) – that reports the fastest growth across all travel retail subcategories.

Together We Grow sustainability platform and cocoa traceability

Among the travel retail exclusive initiatives launched in Cannes, the premium brand Nestlé Sustainably Sourced Cocoa seeks to recruit the younger generation and features a variety of chocolate flavors in both tablet format (170-grams and 270-grams) and a 48-piece sharing bag. Nestlé Sustainably Sourced Cocoa is made from 100% sustainably sourced cocoa through the company’s Nestlé Cocoa Plan. “The range will drive incremental sales by attracting the fastest-growing consumer segments – notably Gen Z – into confectionery,” said Dryburgh.

To further support sustainability, the company launched a category platform called “Together We Grow.” Described by Nicola Wells, Head of Category Development, as a communications platform that works across the consumer journey, from pre-trip digital assets to ultra-flexible in-store merchandising solutions, including gondolas made from 100% recycled material, adaptable shelves and interchangeable side panels to ensure longevity of use. The travel retail-specific sustainability platform adapts to brand messaging and product display. According to Wells, the merchandising concept showcases multiple brands tailored to passenger mix, with clear proof points on the positive impact of programs such as the Nestlé Cocoa Plan.

“Together We Grow meets the needs of consumers, brands and retailers alike. It’s a response to the increasing concern among shoppers about greenwashing. They want to know that brands are doing what they say, and so we’re leading with proof points across our press and in-store. The gondola engages travelers at all points of the consumer journey and enables brands and retailers to demonstrate their sustainability credentials,” shared Wells. “It also gives Nestlé a platform to execute retailer-specific objectives. Many retailers find it difficult to communicate sustainability in an impactful way, and so this is something they can get behind.”

Nestlé Sustainably Sourced Cocoa will replace the Nestlé Swiss range and is a direct result of the company’s work to support cocoa farmers and their communities which is accredited by the Rainforest Alliance. Launched in 2009, the Nestlé Cocoa Plan is based on three pillars: better farming, better lives and better cocoa. The plan aims to improve the way that cocoa is grown and the livelihoods of the farmers; to improve the lives of the women and children in cocoa-growing families; and to improve the traceability of cocoa. Nestlé is on a mission to achieve full traceability of all cocoa products by 2025. Eighty percent of the company’s cocoa supply this year – approximately 250,000 tons – came from nine countries and over 150,000 farmers.

Based on two points of differentiation – gifting and sense of place – Nestlé is releasing and updated line of KitKat gift packs that highlight six select destinations

KitKat’s “Live Your Best Break”

During a press event at the exhibition, Aura Sanchez Farrera, Global Head of Marketing, NITR, presented a list of Nestlé’s priorities, which include to build KitKat into a travel icon, compete in gifting, unleash coffee, establish VMHS and meet local consumer needs. The company’s agenda is full and Nestlé is on its way to crossing off a number of its to-dos.

This year, Nestlé is completing the KitKat Senses collection with two new innovations: KitKat Senses Cookie Dough tablet and KitKat Senses Mini Moments – Milk & Lotus, which will launch in collaboration with Lotus Biscoff and replace current Mini Moments and Mini Dessert SKUs. A sign of development in Nestlé’scommitment to achieve 100% recyclable or reusable packaging by 2025, KitKat snacking and sharing lines now consist of paper pouches. Plus, in the works and based on two points of differentiation – gifting and sense of place – is an updated line of gift packs that highlight six select destinations.

Launched at the end of 2022, Sanchez Farrera noted that the industry-specific “Live Your Best Break” campaign amplifies the voice of KitKat and has affirmed NITR’s digitally-driven approach to engagement. With the purpose to increase sales and generate brand awareness pre-trip (via digital assets), in-transit (via media screens, permanent visibility and a shop-in-shop concept) and post-trip (via social media and influencers) at select international airports, the campaign delivers tailored messages during each stage of the travel experience.

“Live Your Best Break” kicked off last year and ran November 1 – December 31 worldwide. The campaign reached passengers via digital touchpoints throughout the consumer journey. During the nine-week period, the campaign recorded 135.1 million cumulative impressions, exceeding its target of 86.6 million. On a global scale, it delivered an overall click-thru-rate of 2.36%.

“The campaign was not just a win for NITR, but also a win-win for travel retail consumers and retailers. Digital technology, when harnessed to our key marketing messages transforms the accuracy and efficiency with which we reach potential customers and enriches the quality of our impact on them. ‘Live Your Best Break’ was also timelier, as consumers were in travel planning mode and therefore, more capable of immediate response than traditional static media that is disconnected from their travel frame of mind,” explained Sanchez Farrera.

Nestlé has added two new blends to its Nescafé collection: Nescafé Farmer’s Origins Colombia and Nescafé Farmer’s Origins Latin

Travel, health and wellness

Speaking about regional and global opportunities for growth in the coffee and wellbeing (VMHS) subcategories, Sanchez Farrera introduced two new blends to the Nescafé collection: Nescafé Farmer’s Origins Colombia and Nescafé Farmer’s Origins Latin America. According to Nestlé, the additions enable retailers to offer five distinct product ranges to meet all consumer profiles. As shared by Nestlé, consumers are 1.5x more likely to buy coffee versus confectionery and wellbeing is rapidly rising as a common priority post-pandemic.

Sanchez Farrera also elaborated on NITR’s partnership with Dufry to bring health and wellness brand Solgar to travel retail. The two teamed up with Nestlé Health Science to launch Solgar at the retailer’s shop-in-shop concept Mind, Body & Soul. The six-month trial started in April at Zurich Airport and Athens International Airport; both airports are home to one of Dufry’s 20 global innovation stores used to test-run new projects.

“There is compelling evidence that VMHS products can offer support and benefits for travelers,” said Sanchez Farrera in an earlier statement. “These range from supporting immunity and the digestive system when visiting different countries to helping with sleep issues, balancing and boosting energy levels and maintaining nutritional balance during dietary changes.”

Solgar features more than 300 products in over 60 countries globally. While it is the first wellness brand to be trialed in travel retail, the Nestlé portfolio includes multiple leading brands such as Vital Proteins, Garden of Life and Nature’s Bounty, all of which are seen as offering potential in the channel.

When it comes to VMHS – while still at the test and learn stage – Nestlé is set on portfolio and geographical expansion post-pilot program. Right now, the company is testing to learn more about the size of this opportunity and figure out the best way to execute it. Similar to coffee, Nestlé is following a consumer-led approach to identify needs on a regional basis and across nationalities to tailor its offer to passenger mix.

“The trick is to think about the location and then tailor the assortment to that; and take it on a regional basis in terms of non-confectionery. The assortment will vary per region depending on the different consumer needs. For example, coffee is strong in the Middle East. We can offer consumers something they can’t buy in the domestic market. It’s about giving the consumer something that they can’t get elsewhere.

“When entering products into travel retail that the consumer is not expecting, it’s about pre-trip awareness – making travelers aware of what is available – so they know what to look for and understand why they want it,” Wells told Global Travel Retail Magazine during a follow up interview in Cannes.

Food Reimagined

Alongside category development, two-time winner at the 2023 Frontier Awards – named “Supplier of the Year” and “Star Food & Confectionery Product of the Year” for Smarties Cool Creatures – NITR is examining cross-category potential. Delivering on the Execution segment of its VERSE model, Nestlé will soon be unveiling a future-focused Food Reimagined store concept and design created in partnership with Portland Design. Described as the antidote to apathy, the layout promises to optimize space, consolidate flavors and showcase local brands. The design concept brings together multiple subcategories like hot drinks, VMHS and local in one place and acts as a “hope destination” for travel, health and wellness.

“We talk a lot about why food is important – about why it should be prioritized and given more space. But, people ask how do you do this? [Food Reimagined] is a thought leadership piece on offering a solution. It is not one-size fits all; there will be elements that people will want to use. It’s a way of thinking and a set of principles about improving the flow of the overall store and what to put where in order to drive cross-category between global and local,” said Wells.

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