The Estée Lauder Companies’ recently appointed Global Travel Retail President, Israel Assa tells TRBusiness that its new 300,000sq ft distribution centre is a symbol of the company’s commitment to the travel retail industry, whilst insisting that the channel offers enormous growth potential despite what he calls ‘short-term volatility’ in the market.
TRBusiness spoke with Assa on-location at the opening of a new ‘state-of-the-art’ distribution centre in Galgenen, Switzerland, which ELC says will double its total output capacity, ‘enabling the flexibility necessary to adapt to the channel’s high growth potential’, it said.
ELC is home to market-leading beauty brands, such as Estée Lauder, Clinique, Mac, La Mer, Bobbi Brown, Aveda, Jo Malone London, Tom Ford Beauty, Le Labo and Dr. Jart+ among many others, and its travel retail division represented 28% of the group’s sales in fiscal year 2021.
FIVE YEARS IN THE MAKING
Plans for the new facility were formalised pre-pandemic in 2017 and the centre finally began operating in November of last year. Understandably the official opening was postponed until now.
Video below: ELC’s new, state-of-the-art distribution centre in Switzerland will support the dynamic growth of the Company’s TR business
Addressing the timing of the opening and the challenges facing all travel retail stakeholders currently, Assa insisted that volatility in the market was short-term.
“I think there’s definitive short-term volatility that’s being cause by the pandemic; there’s short-term volatility that’s being caused by other geo-political factors, but the truth is this facility and our stance overall is that we believe in the travel retail channel and we’re 100% committed to the success and resilience of the channel.”
ELC celebrated the milestone opening today (7 June) in the presence of VIP guests among which were representatives from its travel retail partners, Dufry, DFS, Dubai Duty Free, Gebr. Heinemann, Lagardère Travel Retail and Aer Rianta.
The following ELC representatives were in attendance: Fabrizio Freda, President and Chief Executive Officer; Roberto Canevari, Executive Vice President, Global Supply Chain; Nadine Graf, Senior Vice President, General Manager, Europe, Middle East, and Africa (EMEA); Maike Kiessling, General Manager, Switzerland; Jamal Chamariq, Senior Vice President, Global Supply Chain, EMEA and Travel Retail Worldwide and Sascha Trabelsi, Vice President, Supply Chain, Travel Retail Worldwide.
LONG HISTORY IN SWITZERLAND
ELC is well-established in Switzerland, opening its affiliate office more than 55 years ago and its first manufacturing plant more than 45 years ago. It is the fifth largest employer in the canton of Schwyz.
The company currently has four distribution centres in Switzerland. “Switzerland is also home to ELC’s EMEA and TR Supply Chain Management Hub in Wollerau, which drives agility, speed, and collaboration across our EMEA and Travel Retail supply chain teams,” added the company.
Whilst expanding its already sizeable distribution footprint in the region, the new facility will enable ELC to ‘remain at the forefront of delivering its prestige beauty products and high-touch services to travelling consumers around the world’, it says. The centre is also equipped to further drive the company’s sustainability efforts.
“Travel retail continues to demonstrate its resilience, driving tremendous growth over the last decade for The Estée Lauder Companies. We remain extremely confident in the channel for the long-term, especially as travel restrictions ease globally and people start travelling again,” said Fabrizio Freda.
“The opening of our new Galgenen distribution centre will enable us to adapt even better to ever-changing retail needs and growth opportunities for the channel, and expand upon our existing distribution presence in Switzerland,” added Freda.
ELC MARKS 30 YEARS IN TRAVEL RETAIL
Assa added his remarks: “As we mark the 30th anniversary of The Estée Lauder Companies’ travel retail business, we are incredibly proud of our track record of exciting and delighting travellers all over the world with our exclusive products and high-touch experiences for the travel retail industry and having made the channel an integral engine of growth for ELC.
“As we look to the future, this investment here at Galgenen is a testament to our belief in the long-term growth potential of this channel and that by investing in these capabilities and with our retailers, we can capture the next generation of growth in this dynamic, prestige marketplace.”
“Galgenen will serve as a cornerstone of The Estée Lauder Companies’ agile, global fulfillment network,” said Roberto Canevari. “This distribution centre will not only significantly enhance our capacity but enable operational efficiencies, speed-to-market and resiliency through innovative, highly automated equipment and technologies. Additionally, we are proud that Galgenen is also a shining example of ELC’s commitment to safety, quality, and sustainability.”
According to ELC, the building’s design is based on the newest standards to reduce energy and water consumption. It features total LED lighting, an energy-efficient HVAC system and the roof’s solar panels generate 1600 kilowatts at peak performance (kWp).
Furthering sustainability efforts, a comprehensive waste management system has been implemented to separate out numerous recyclables, with electric trucks ready for waste removal. As part of the recycling undertaking, wooden waste pallets will generate renewable heating energy.
“Worldwide, ELC is driving strategic initiatives to reduce its environmental footprint, integrate environmentally responsible practices and invest in innovative technology as part of efforts to not only provide consumers with transformative products and experiences, but also to contribute to the well-being of the planet,” it stated.