Airports evolved from traditional transportation hubs into retail and hospitality channels where travelers are increasingly receptive to new products, especially with a wellness angle, according to an expert.
Younger travelers who are eager to try new products are increasingly a target demographic for airport retailers, added Melinda Smith, vice president of retail markets at OTG, an airport and hospitality operator that helps brands with merchandising and tasting events
“Approximately 53% of Gen-Z and Millennials now fly more than three times per year,” Smith said, adding that these consumers are “highly receptive to discovering new brands, products and trends.”
Younger shoppers’ behavior has influenced how airport retailers curate assortments on shelves. For example, OTG’s CIBO markets “continuously pulse products in and out of the assortment” on a monthly basis allowing operators to respond quickly to emerging trends and changing consumer demand instead of relying on annual or twice-yearly resets.
Smith suggested the travel environment itself creates favorable conditions for discovery and trial due to surging airport traffic in recent years, TSA liquid restrictions and longer dwell times in airports.
“Airports are no longer just a transportation hub to get from point A to point B but are increasingly commerce to the latest retail goods, entertainment and culinary experiences,” she said.
Functional beverages take off
Consumer preferences toward health, wellness and functionality across beverages are increasingly mirrored in airport retail.
“Consumer beverage preferences are continuing to shift away from traditional carbonated soft drinks toward products that offer perceived health, wellness, functionality and convenience benefits,” Smith said.
The most popular beverage categories are flavored sparkling water, bottled water, ready-to-drink coffee, enhanced hydration products and protein beverages.
“The most significant beverage trends are increasingly centered around functional wellness, mindful low- and no-alcohol choices, and more complex flavor profiles,” Smith said.
Interest in functional beverages continue to grow as consumers look for products with “energy, hydration, focus, recovery and other lifestyle benefits,” she explained.
Energy drinks have grown about 8% year over year and now outpace traditional soft drinks, while overall functional beverage sales are experiencing double-digit annual growth, she added.
She also pointed to growing opportunities for high-protein beverages and single-serve formats as the use of GLP-1 medications influences eating and drinking habits.
“High-protein and functional beverages are particularly well positioned within this shift as consumers increasingly look for products that provide a specific benefit in addition to convenience and refreshment,” Smith said.
Flavor still matters
Consumers are also seeking more adventurous flavor profiles, including combinations that blend sweetness, acidity, spice and heat, Smith said.
Examples include “mango-habanero, guava-jalapeño, and pineapple-chili,” alongside tropical fruit blends, citrus-forward drinks and botanical beverages.
For airport retailers, maintaining flexibility is essential because travelers may be seeking “functional benefits, higher-protein options, or unique flavors that provide an experience beyond traditional beverages,” Smith explained.
Airport retail’s unique environment
While airport retail shares some of the same category management foundations as traditional retail, the operating environment is considerably more complex, according to Smith, who spent 23 years working in conventional grocery and retail channels.
She noted that pricing often aligns with local market expectations through airport street-pricing requirements, where vendors cannot charge more than off-airport prices for food, drinks and retail but are allowed a small percentage markup for operating costs. Products also move through narrow controlled logistics networks involving security screening, warehousing and multiple handling touchpoints before reaching shelves, she added.
Airport’s retail complexity extends to inventory management.
Unlike traditional stores, Smith said, airport locations generally operate with limited backstock, while demand can fluctuate rapidly because of flight delays, cancellations, weather events and changes in passenger traffic.
