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RETAIL/F&B Last modified on July 4, 2013

Everybody wins

Susan Gray takes a closer look at F&B innovation in Australia as airports bid to boost revenues and raise customer satisfaction levels.

Over the last few years, food and beverage has rapidly evolved to become a diverse, enjoyable and innovative part of the airport journey.

Whilst this is evident across the world, in this article we focus on F&B innovation in Australian airports.

Australia has a very strong domestic food and beverage market, supported by a buoyant and growing eating-out culture. Recent retail figures show that whilst the Australian retail market overall is largely static, a look at the F&B numbers in isolation shows healthy and sustained growth.

This vibrant marketplace is witnessing fantastic F&B innovation on a daily basis. An increasing amount of the innovation is in the less tangible aspects of the dining experience – the ambience, design features, menu delivery, service options, lighting and so on.

However, whether environment-related or food-related, some common themes are evident. Trends that airports can tap into include:

Provenance and authenticity of product, of packaging and of environment. Brands that can demonstrate they are sourcing their products or ingredients ethically and responsibly are growing in popularity. This is as important with major names such as McDonald’s as it is for smaller local players.

Localisation and sense of place. The F&B experience can be a powerful and authentic way of conveying a sense of place for airports and of bringing the character of the local region into the terminal experience.

Sustainability of product, of packaging and of environment. Environmental awareness may be difficult to measure, but it is now commonplace to find eco coffee cups and locally sourced, low food-mile ingredients.

Portability and ‘food on the move’. There have been many developments in this area in response to modern consumers’ changing behaviours.  

Recognising this, some airports are not only requesting, but requiring, these aspects to be incorporated as an integral part of the overall airport experience.

When running its most recent F&B tender, Cairns Airport explicitly required bidders to provide a local sense of place and demonstrate true innovation.

Alicia Prince, general manager, commercial, at Cairns Airport, explained: “We started with the view that the F&B offer at Cairns should be regionally representative, putting a strong emphasis on positive brand attributes like sustainability and local provenance.

“Collectively, the airport, our partner HMSHost, and local coffee plantation Skybury have combined to deliver a truly local version of an airport staple – the coffee offer.”

The unit has a fit-out inspired by the plantation’s eco-friendly design and features imagery that captures a sense of the region.

The menu features locally grown produce, a takeaway retail element including coffee beans (whole and ground), related products like chocolate-dipped coffee beans, and branded, sustainable packaging. Skybury is a fine example of F&B innovation in practice.

But many airports are still struggling to be truly innovative when it comes to food and beverage. This could in part be due to an unwillingness to relinquish the commercial model which has historically delivered such favourable commercial returns for airports.

Increasingly, the more progressive airport management teams are exploring innovations in commercial arrangements, designed to encourage and reward experimentation and innovation whilst ensuring that this important income source is well protected.

Not every single outlet can be a unique, boundary-pushing concept –  getting the core or basic offer right creates a commercially solid platform upon which to innovate. This starts with an analysis of the market and the target customer groups and strategic planning of F&B locations with relation to passenger flows, retail and other services.  

A balanced portfolio approach is required. After all, customers will tell you they want choice. If the airport’s size can support several categories and brands, this is the ideal. But for many smaller airports or standalone terminals this variety of brands can be commercially difficult to deliver.

One of the real challenges in bringing new brands to the airport is that F&B in an airport environment requires a different operating model from that of the high street. Fixed costs and variable costs are considerably higher than at most downtown locations.

This is further complicated by the challenge of replicating the more intangible aspects of an F&B experience, the ambience and environment that make a place unique and the experience memorable.

 

A potential solution is for an airport to partner with a smaller, local brand, and with a global expert operator like SSP, HMSHost and Delaware North. This trinity approach works only if it’s a collaborative one, built on long-term, clearly articulated, shared ambitions.

A great example of this in action is at Perth Airport. As executive general manager, Scott Norris, explains: “F&B innovation for us means always challenging the status quo, and looking at new ways to deliver a great experience for our customers.

“Our new Domestic Terminal 2 has a very specific and unique passenger profile, with a high concentration of passengers working in the resources and mining sector. We required an F&B experience customised to our passengers, their spending habits, and their unique attributes.”

Norris said that the Little Creatures brewery in Perth is a world-famous locally-based business, and Perth Airport worked very hard developing a unique F&B vision.

“Our F&B partners, Delaware North, have now brought this Western Australian icon to the airport. It wasn’t just about opening a pub with a famous brand – it was about working with our partners to deliver a bespoke concept unique to Perth Airport.

“The result is the Four Alls Brew House which brings the distinctive character of the Fremantle micro-brewery to the airport.”

What of the next round of F&B innovation for airports? We see one trend having plenty of relevance for airports – pop-up shops, pop-up restaurants and other formats of temporary installations.

A recent downtown Sydney example was the Real Food Projects store, an inner-city pop-up which stocked only ‘seasonal, local and sustainable foods produced within a few kilometres radius of the store’.

Promoted on Facebook and Instagram, part of the appeal of the store was also the limited availability and therefore exclusivity of the products.

This is a powerful message that resonates well in an airport environment and is part of the reason why ‘premiumisation’ and customisation are showing such positive trends in domestic and travel retail today.

Similarly, the ‘food truck’ movement in inner Sydney has potential at airports. Co-ordinated by the local council, the trucks are run on a franchise model, with the current mix comprising ‘mobile’ versions of local eateries.

The trucks are themed and provide food prepared and served with portability in mind. One of them, the Eat Art Truck, even makes one side of the truck available as a canvas for renowned and up-and-coming street artists on a monthly basis.

Nine trucks currently roam the city, situating themselves strategically near high traffic locations at key times of the day and night. Using the Food Trucks app on your smartphone, you can check out which trucks are currently open, and their location on Google maps. You can also get updates on where they’re going to be next via their Twitter feeds.

This type of innovation is perfect for areas of high passenger volumes where space limitations make permanent F&B impractical.

Retro Espresso pioneered this approach in the Pacific, with two Airstreams located in the forecourt at Auckland International Airport delivering a distinctive and memorable experience including coffee and fresh, locally baked cakes and pastries.  

Innovation is a mindset, and F&B provides a fertile ground. Ultimately, creating and delivering a profitable and sustainable airport commercial programme is both an art and a science, and getting the balance right is critical to achieving commercial success and delivering a great F&B experience to consumers.

About the author
Susan Gray is the managing director of CPI Australia, part of Concession Planning International, which helps airports, travel retailers and brands provide a distinct customer experience.
She can be contacted at

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