TR Consumer Forum 2024: Day 1 panel discusses ‘Walking The Eco Talk’

By Benedict Evans |

The final panel session of the first day concerned sustainability within the travel retail industry.

The focus of the second – and final – panel session of day one of the TR Consumer Forum was on the role played by actors across the value chain – landlords, operators, brands – in responding to increasing demand for sustainable solutions to ensure long-termism in the concessions model. 
The panel consisted of Clara Susset, Chief Operating Officer at m1nd-set; Shruti Ahuja, Head of Sustainability (APAC & EEME) and Safety (EEME) for SSP; Nuno Amaral, Chief Operations and Business Development Officer for ARI; Nicola Wells, Head of Category Development for Nestlé International Travel Retail; and Eugene Barry, Chief Commercial Officer at Dubai Airports.

m1nd-set research

Clara Susset, Chief Operating Officer at m1nd-set, detailed interesting trends in sustainability which will have a big impact on the direction the industry takes when tackling these holistic issues.”TR shoppers care about sustainability, but it’s not top of mind for them.

From our research we see they need cues to really understand what the brand is doing in that space. We see an overwhelming preference for dedicated spaces to sustainably-focused products, such as confectionery, beauty, alcohol, etc,” noted Susset.

Susset said she has seen a particular challenge with the younger travellers; she referenced a lecture she gave recently whereby she was astonished by how skeptical the students at her lecture were over the sustainability credentials of key players within travel retail.

“One of the biggest concerns for consumers is ethical sourcing, and focused primarily on a solo/group contribution to the environmental damage. European consumers are more concerned about sustainability, but also less easy to convince about a product’s sustainability credits,” she said, adding: “Asia is a positive region insofar as there has been a massive shift in terms of attitude.”

ESG here to stay

“There is an element in terns of business development where we bid and airports want retailers to tender sustainably, everything from power level to conception, community outreach, and it’s been much more dialled up by airports,” noted Nuno Amaral, Chief Operations and Business Development Officer for ARI.
Amaral made specific reference to an ongoing project for Zayed International Airport through ESTIDAMA, the sustainability initiative of the Abu Dhabi Urban Planning Council (UPC). It is essentially Abu Dhabi’s vision for sustainability as the foundation of any new development occurring in the Emirate.
A few years ago it was barely even mentioned now it’s a key part of our bids,” he said, adding: “It all has to do with how you build the shop, all the way from where you source your materials, where you paint, which substances you use etc. ESTIDAMA has for example established a minimum requirement of sourcing all resources within a 500km radius from a project. we’re currently undertaking a project within a greenfield airport, so there is a laser-focus on ESG requirements.”

One of the key points which emerged from the panel discussion was a need for focused and broad co-operation between the various stakeholders in effectively communicating sustainability initiatives at the shop-floor level.

Amaral spoke also to the inter-connectedness of such efforts: “We are really reliant on supplier credentials, but in terms of what we sell, our strategy is to give those credentials and not create sustainable promotional areas. we believe people don’t look for sustainable products directly, but look by category, and then look for sustainability within that category.”
Amaral closed by addressing the commercial reality of ESG-focused policies for all stakeholders: “The reality is we are retailers, we are intermediaries in this value chain. I think airports also perhaps would be afraid to pose further pre-requisites for ESG in case they lose out on potential commercial revenue.
We are going to have to take some difficult decisions in terms of costing, and hopefully with emerging technologies the cost will go down.”

Margin call

Philipp Ahrens Senior VP, Center Management for Vienna Airport, commented on the F&B offer at Vienna Airport: “We’re trying to invest in the food court ourselves. There will be a tender coming up, and hoping also to inspire local planners, and want the materials to ave a reflection on the region, on the Austrian lifestyle. one has to think beyond just plastic and reusable cutlery.

F&B operators are putting a huge emphasis on local products; they try to buy local veg, local meat, not imported. This process is more expensive, but you have a story to tell.”
Ahrens pointed to the expectations of younger generations of travellers as a key consideration within re-structuring the supply chain: “Younger people are more focused on it and prepared to spend more so long a they know where it comes from. We want local operators and brands, with a wider choice, freshly cooked, freshly prepared.”
Ahrens also referenced the growing potential of pre-owned luxury goods within travel retail, both as a commercial alternative and a win in terms of sustainability: “Pre-owned certified has really big potential. The question as an airport is are you prepared to accept less turnover but higher margins. We need to be prepared to chip something in. There’s no crisis in the world which can kill luxury.
For example, Helsinki has open-floor pre-owned luxury store which is incredibly successful from a storytelling point of view, though not so much financially. The question is not whether the customer wants it but what can we offer them.”

Legislation and co-operation

Ahuja echoed the sentiments of Amaral: “ESG is a pre-requisite, it is expected of you. Nowadays we approach this with the idea of a lot CSR activity.

At the end of the day our company is a food company, so we need to find solutions for our supply chain, reduce carbon emissions, and it helps us communicate to consumers what they wanna choose from.”

On the responsibility of brands and operators in communicating their sustainability goals and strategies to consumers, Ahuja said: “Explain it in clear terms, make it super simple. 60-65% sales was from low-carbon food offers following a campaign to show consumers the numbers about where and how our product was sourced. It’s all about taking the conversation to the consumer.”

Speaking to the need for co-operation within the industry, Ahuja noted: “Airports are driving the conversation, but there is a lack of cohesive legislation around this. It should be awake-up for us sitting here in this room.”

Data compiled by m1nd-set showed younger travellers were increasingly skeptical of sustainability claims made by large suppliers especially.

“One of the challenges we see is a diversity of legislation which can come very quickly, without allowing for the relevant sustainable processes to be put in place, said Wells, who added: “It’s about having an ongoing dialogue about sustainability between stakeholders, understanding from a brand point of view what the airport needs, and it needs a holistic approach.

Thinking longer-term about brand activations and fixtures, dedicates spaces are needed where we can communicate to our consumer, because if we say nothing, they assume we’re doing nothing.”

Wells then talked about the challenges Nestlé has faced in terms of the court of popular opinion: “Nestle suffers from tall poppy syndrome, and has been quite reluctant to step forward and display its sustainability credits. it’s important to look for accreditation from other bodies, so Rainforest Alliance is a known entity which gives the consumer comfort. it’s also putting what you’re doing into the right language.”

On how such messages should be communicated, Wells echoed Ahuja in saying: “Be very factual, be very credible in talking about what you do and showing you’re being accredited by a third-party.”

READ MORE: TR Consumer Forum 2024 photo gallery now live

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