US Brokers

BY JULIE BAXTER

As the onboard hospitality world heads to Long Beach, California, for the IFSA conference, Julie Baxter talks tastes, trends and airline demands with leading U.S. brokers.

This is currently a good time to be a broker or a caterer in the U.S. Just as the UK and Europe seem to be moving away from complimentary food (witness British Airways), U.S. airlines seem to be moving back to it, to the clear benefit of caterers and brokers across the continent.

Paul Normand, who heads up the HACO brokerage business, says: “We are reaping the benefits of the stringent cost-cutting that has gone on in recent years to make airlines more efficient, coupled with the bonus of falling oil prices. U.S. airlines are making a lot of money at the moment and as we have seen before, this is a circular industry so when the airlines make money they invest and spend on food and improve passenger satisfaction.”

The new buoyancy has brought full-service catering back into Coach, especially on trans-continent flights operating coast to coast, and passengers have been rewarding those making the move with positive feedback across social media.

Normand says: “Delta is leading the charge with this. Customer satisfaction is key and when complimentary catering gets strong positive feedback through surveys and peer to peer recommendations on social media that ensures it stays onboard and sees further investment.”

There is also a strong trend towards branded snacks in Economy, Normand adds: “Brands are king. Some airlines want to be associated with labels that will enhance their brand, others want to find newer cool boutique products to champion as something different.”

Brokers have long been at the heart of the onboard hospitality sector in the U.S. because most airlines in this market value consistency of product. “If they are serving an omlette or a chocolate cake, they want it to be the exact same omlette or chocolate cake wherever the passenger boards, right across the U.S. To ensure that happens you need very robust logistics and people who fully understand the bigger airline operational picture,” says Normand.

HACO has made a strategic decision to focus on big retail brands and brings the likes of Coco Cola, Hershey, Minute Maid and Kraft to the airlines. The company supports brands hoping to navigate the onboard sector, highlighting the scale and the capacity commitment they are going to have to make to be successful with airlines.

Normand says: “We have found the most successful strategy for us is to concentrate our core business on big retail brands which often already have a nationwide reach. Smaller individual product suppliers rarely fully appreciate the scale of what is required.”

Dan Day from AMI also recognises the importance of big brand names in the U.S. He says: “As inflight duty free sales dwindle, airlines are using more space onboard for food service products and to upgrade what they offer for buy-on-board. They have been particularly keen to reflect the popularity of national brands within their range, so we have seen increased onboard exposure of Starbucks and Whole Foods’ branded products, items passengers are already familiar with on the ground.”

Optimistic outlook

He is optimistic investment in improving the onboard offer out of the U.S. will continue and notes: “In the U.S., airlines have in recent times actively worked to greatly improve the buy-on-board products they offer, with many freshly-prepared products now included on their menus.

The trend towards a fresh retail offering seems to be growing and we are seeing more demand for this and less for snack boxes. Airlines are beginning to recognise that they need to continue improving on quality because so many of their passengers buy from airport concessions and then bring the meals onboard. They need to compete with the offer on the ground.”

AMI has teams based in the key city hubs for the major U.S. airlines to better support their product development with personnel in Dallas, where American Airlines is based; in Chicago for United Airlines, and in Atlanta for Delta.

Quality rising

Kim Brown, DFMi, agrees that the buy-on-board menu is set to remain an important part of the onboard mix. “Onboard sales are growing in the USA with every year that passes. Passengers seem to expect to purchase items (as opposed to receiving them complimentary) and therefore the stigma around paying has disappeared. This shift in the passenger mindset gives the airlines a greater ability to provide quality food in their retail programme so they typically include fresh salads, sandwiches and cheese/fruit trays.”

Brown, like the others, reports a trend towards gluten free and non-GMO products and a demand for shelf-stable snack boxes that are increasingly adapted to provide healthier options.

“Passengers are looking for cleaner labels, ‘real food’, and most airlines now seem to have special boxes that meet the passenger’s individual concerns regarding food consumption,“ she says.
She also detects strong passenger desire for hot foods, an enthusiasm most U.S. airlines cannot currently meet as they do not have ovens for heating on domestic flights. Brown says: “The return of complimentary food (that can be served cold) is currently being tested on selected long- haul domestic flights for all classes. Results have not yet been published but passengers who have experienced the service are pleasantly surprised by this addition to their flight experience.”

DFMi has added greens and grain salads, pre-made sandwiches (fresh and frozen), pre-sliced deli meats, all natural, shelf stable meat snacks, bagels and spreads to broaden the healthy choices on offer to passengers.

Competitive edge

Brown concludes: “U.S. airlines are very competitive as to who will be the ‘first’ or ‘biggest’ or ‘best’ at what they do.  Passenger feedback and ratings have become very important to customer service and marketing departments, as they all vie for the top spots for awards in the industry, including the food they serve. Most importantly, they strive to maintain loyal customers by offering improved flight services and Club/Lounge options where they now serve hot and more substantial food choices throughout the day.” 

While responding to change is clearly key, Normand with 35 years’ experience in the business sounds a note of caution. He says: “Consumers often think they want new, niche, on-trend products, they like the idea of them but the truth is that the mass of airline travellers want mass market product. Passengers say they want super-healthy products but they actually buy the indulgent, familiar treats. It is also worth remembering we are in a circular business. Currently, U.S. airlines are doing well, so we can do well, but no doubt if they start to do badly in future vb catering will once again be among the first things to go.”