- Food, including confectionery & chocolate, is the number 1 driver of cross category purchase and second most purchased category overall
- Food is THE number ONE most purchased category for Gen Z and the fastest growing for this segment
- Gen Z will be the biggest travelling segment by 2028 - 1.2 billion passenge
Nestlé International Travel Retail (NITR) has upped its focus on the ‘marriage’ of two major trends in the travel retail industry.
The company launched its Food#1 most purchased category strategy in 2021 having realised the potential of food beyond confectionery. Its focus on that strategy is delivering category growth with food the fastest growing catgory and already most purchased category in Europe and the Americas.
To further underpin this strategy NITR’s attention is on realising the opportunity of the Gen Z consumers who are expected to be the biggest travelling segment by 2028.
According to NITR’s Marketing Manager Aura Sanchez, Food and Gen Z are the ultimate winning combination to drive category growth and incremental industry revenue.
“When we launched our #Food 1 strategy we were convinced we could turn what was a declining market in global travel retail into one of growth. Our plans were based on figures which showed strong 77% growth on the domestic market versus only 7% in global travel.
“We saw an opportunity to rejuvenate the category, to accelerate post COVID industry recovery, and we took it. And, to date, the good news is that we made the correct bets in terms of Food and its potential,” she says.
Sanchez cites data from research agency m1nd-set which shows strong category growth in 2023 from 31% to 37% and notes that Food is also expected to be the fastest growing category by 2027.
Gen Z will outnumber Millennials as the largest airline passenger group by 2028, accounting for approximately 1.2 billion passengers flying in 2028. They already account for 40% of consumers worldwide and currently have a mighty global spending power of US$200 billion.
“The figures speak for themselves and are even more defined when you consider the Asia Pacific region. There are around 280 million Gen Z in China, representing the second largest Gen Z population in the world, surpassed only by India, with almost 400 million,” Sanchez continues.
“According to m1nd set data from 2023 Gen Z are one of the least engaged in terms of visiting and purchasing in GTR. The good news is that the food category is the key category to unlock the potential revenue of this segment. Already we see that food is most popular category with Gen Z and also the fastest growing in terms of increased purchase.”
Sanchez compares those figures to Gen Zs’ purchasing in the overall Food category. 43% of Gen Z already buy Food. Chocolate is their most purchased sub category with a substantial increase from 26% to 37% for confectionery and non-confectionery up 3% to 10% between 2022 and 2023.
“Food is the key category to unlocking the potential of Gen Z as they are the highest purchasing segment already. The reasons are clear. Food products in travel retail offer a low or accessible price point. It’s a fun category, with opportunities for engagement and digitisation,” she says.
“Let’s consider what Gen Z consumers are looking for in travel retail. They are known for their focus on sustainability and no category in travel retail delivers that better than Food. Gen Zs are impulse driven shoppers and Confectionery and Food is the impulse led category. Gen Zs are looking for novelties – another box ticked – authenticity, Sense of Place, and exclusive products. Food is the perfect category, and NITR has the products, to meet all these demands.”
According to Sanchez, KitKat® is a key brand here, as is the recently launched Nestlé Sustainably Sourced Cocoa® line.
“We launched the first KitKat® made with cocoa mass from beans grown by farmer families engaged in Nestlé’s ground-breaking Income Accelerator Programme* into European travel retail earlier this year. This ‘Breaks for Good’ KitKat®not only tastes good but also raises awareness about the sustainability of the cocoa used in the iconic bars.”
The KitKat® wrapper includes a bold ‘Sustainably Sourced Cocoa’ stamp and a QR code directing consumers to details on the programme and its immense impact on the lives of cocoa farming communities.
Hot on the heels of the KitKat® launch came the new travel retail-exclusive Nestlé Sustainably Sourced® cocoa range, rated as NITR’s biggest news of the year”. With a ‘does good, tastes great’ catchline, the new line is another to underline Nestlé’s commitment to a sustainable future, and to capturing the interest of the Gen Z travellers.
“We are confident that Gen Z consumers will be quick to relate to these products,” Sanchez says. “They match their shopping preferences and trends and, at the same time, offer a huge opportunity for NITR to cement even closer collaborations with its travel retailer partners. The focus, of course, is on Food and unlocking the potential of this audience.”
* Nestlé’s Income Accelerator Programme was launched in January 2022 to help close the living income gap of cocoa-farming families and reduce child labour risk. At the same time, the programme strives to encourage better agriculture practices. Payments are divided evenly between the male and female heads of household, empowering women to act as agents for positive change by saving, investing and sharing responsibilities.
Cocoa-farming communities face immense challenges, from rural poverty and increasing climate risks to a lack of access to financial services and basic infrastructure, such as water, health care and education. These factors can lead to social issues, including the prevalence of child labour risk on family farms.
By helping families close the gap to living income, Nestlé, through its Income Accelerator Programme, aims to tackle child labour risks and deforestation.
The programme incentivises cocoa-farming families that enrol their children in school, implement good agricultural practices, engage in agroforestry activities, and diversify their incomes. The programme rewards cocoa-farming families not just for the quantity and quality of their cocoa beans, but also for practices that benefit the environment and local community.
The programme has so far supported over 10,000 families in Côte d’Ivoire and is expanding to Ghana this year to reach some 30,000 families. By 2030, Nestlé intends to reach an estimated 160,000 cocoa-farming families in the company’s global cocoa supply chain to create impact at scale.