Skift Take

With their onboard food and drink programs, airlines want to keep passengers happy. But they also want to keep costs reasonable.

For almost a decade, the Germany-based company SkyTender has promised airlines they can revolutionize how they serve drinks by dropping canned sodas and watery coffee and adding special trolleys that dispense fountain-style sodas and specialty coffees, such as cappuccinos and espressos.

Each year, in April, SkyTender brings its contraptions to the World Travel Catering & Onboard Services Expo in Hamburg, where food and drink companies set up elaborate booths in two gigantic halls, hoping to sway airlines. Some, like SkyTender, seek to persuade airlines to invest in new technology. Others hawk speciality jams, artisan cookies, champagne, craft beer, and cider that airlines can sell or give away on board.

Some vendors view it as a make-or-break event. They are typically firms like SkyTender selling technology without an obvious market beyond transportation. Food producers may see it differently — they can sell to retailers — but they still may hope an airline contract will raise their profile, or boost profits.

Conventional wisdom suggests airlines are cutting back, and catering is less important than a couple of decades ago, but that’s not true. Full-service airlines still spend freely on food and drinks for premium customers, and some, like Delta Air Lines, are increasing budgets for economy class passengers, even on shorter flights. Meanwhile, low-cost carriers want to sell better food and drink, hoping that by chasing the artisan, small-batch trends seen on the ground, they can spur onboard sales.

Catering worldwide will be a $28 billion global industry by 2026, growing about 5 percent per year, according to a report from Transparency Market Research.

But vendors can struggle to break in. Airlines and their caterers are risk averse, and it can take them months, or even years, to make a decision. When evaluating technology, like SkyTender’s carts, they want to know the platform can hold up to the rigors of worldwide service. For food and drink producers, they want to know a supplier can deliver not just in London or New York, but in almost every city where they fly.

The average vendor spends hours in Hamburg meeting with airlines over three days. This year, that group included Thistly Cross, a Scottish cider company led by Peter Stuart. He met with half a dozen airlines, but by the last day, he hadn’t gotten close to a deal.

“I wouldn’t say it’s frustrating — I mean, we’re enjoying the journey — but I’d like to achieve something,” he said. “We just want to be there and meet the right person, at the right time.”

Art of the Sale

Earlier this month, SkyTender’s booth on the far edge of one of the halls was buzzing.

Airline employees kept visiting, either because they wanted a free coffee, or because they wanted a demonstration. When a new person would arrive, Isha Maker, head of sales and marketing, would spring into action, walking them to one of the trolleys.

She might first offer a Coke, showing how the cart dispenses fountain soda like machines at McDonalds or another fast food restaurant. Then she’d take them for a coffee, offering flat whites, cappuccinos, or single and double espressos. The machine delivers drinks in seconds.

She and her predecessors have been doing this dance since 2011, when SkyTender first brought its technology to Hamburg. Maker admits it may not have been ready then, but more recently, SkyTender has refined it, improving the technology, getting closer to certification and adding partners like Starbucks and Nescafe.

But finding airline customers remains tough.

“People talk about innovation, and they pay it lip service,” Maker said. “Nobody dares to take the first jump.”

SkyTender may be close. A European low-cost carrier recently tested its equipment, selling espressos, flat-whites, and cappuccinos to passengers, who, perhaps excited that they had more options than mediocre drip coffee, bought three times as many drinks as usual. A firm order or two may come soon, perhaps from European or Asian airlines.

“Nobody’s going to see you with the door wide open, or open it for you,” Maker said. “You depend on word-of-mouth. Everybody is so worried about, what if it doesn’t make it? I understand that risk. I understand that people do not want to stick their necks out.”

“Sometimes I want to shake airlines and say, ‘What is taking you so long?'”

Challenges for Small Producers

Since 1956, the Vandererfven family has produced jams in small batches in Belgium, first selling them at the local market. When Thierry Vandererfven took over from his father in 1990, he expanded, adding vinegar and ketchup and exporting beyond Western Europe.

You can now find Belberry Preserves in many independent hotels. But the company has never had an airline.

Belberry, a Belgian jam-maker, wants an airline to serve its product in first or business class.

With some airlines investing in the premium cabin experience, Vandererfven figures now is the time. Airlines follow overall food trends, and Vandererfven’s product hits most of the buzzwords — local, small-batch, artisan. But in Hamburg, where had one of the tiniest booths, he admitted he found it tougher to persuade airlines than grocery stores or hotels.

One problem was cost. In the United States, a 30 milligram jar of preserves — the size used by hotels and airlines — retails for about $7.

“If you sell to premium supermarkets or department stores, it’s more about the look and feel of the product, and people decide when they are in front of the shelves which ones they will buy,” Vandererfven said. “When customers are on an airplane, they cannot choose their product, so it’s buyers in the office who choose the products, and it is always based on budget.”

Nearby, Stuart, the Scottish cider maker, had a similar dilemma. His company produces seven flavors of hard cider, including strawberry and ginger. It sells it on trains and ferries in the UK, and Stuart is eager for an airline.

The inflight booze business is significant. American Airlines said recently it sold and gave away almost 6 million beers last year, and while the majority were made by giant companies, American also has been highlighting craft labels, such as Angry Orchard, a cider owned by Boston Beer Company.

Stuart said Thistly Cross can tap into the consumer preference for local, craft booze.

“I think there’s good business to be done,” he said. “We’ve seen the UK there’s a strong movement for companies who win national contracts to feature an independent, reasonably local, UK brand as part of their portfolio. The more that culture continues to grow, and consumers respond and begin to demand that across all categories, then the more actual business opportunities there are for small companies like ourselves.”

Best Case Scenario

Three years ago, United Airlines wanted to make a splash with new free onboard snacks. Rather than pretzels or peanuts, executives sought something passengers would remember.

It went with the stroopwafel, a confectionary treat made in the Netherlands — two layers of dough with caramel syrup in the middle.

Europeans have eaten them for years, and one of the companies that makes them —Dutch firm Daelmans — already had sold its products to European airlines. But Daelmans wanted to expand to the United States, and it bet a partnership with United would help.

Passengers have enjoyed stroopwafles so much many customers complained last year when the airline said it would stop carrying them. After the uproar, they returned in January, and a United spokeswoman said the airline gave out almost 6 million stroopwafels on domestic flights in the first three months of this year.

While that’s not a huge number for Daelmans, which makes 1.2 million per day, it has helped the company with U.S. sales, an executive said.

“People recognize it from the plane, and then they saw it at the big retailer and they paid,” said Hein Pessers, a key account manager, who came to this year’s show to try to add more airlines.

A few booths over, Alex Simpson, sales coordinator at Farmhouse Biscuits, a UK cookie company, was hoping for similar magic. It sells in retail shops across the the UK, but business dips after Christmas, and Simpson said an airline contract could keep the factory humming in the first quarter.

Farmhouse Biscuits showed off several cookie flavors on the show floor at the World Travel Catering and Onboard Services Expo in early April.

By day three of the show, it did not appear the Farmhouse Biscuit would match the Daelmans’ Stroopwafel. Airline executives would come, sample a cookie — choices included orange and cranberry, triple chocolate fudge, and red velvet — and disappear.

“It’s quite brief,” Simpson said. “They’re not here for long.”

It’s not an easy business, but Bonnie Knutson, a professor of hospitality business at the Broad College of Business at Michigan State University, said brands should fight for airline contracts.

She said companies like Daelmans and Biscoff, the European cookie-maker served on Delta and American, prove deals can boost sales at on-the-ground retailers.

“If your brand is associated with or offered on Delta, which is a respected brand, it automatically elevates your reputation,” she said.

It’s a different calculation for a buy-on board product, Knutson said, but even smaller brands like Thistly Cross can win if they’re sold on planes.

“If you can get on the airplane, you may get only three people to try it,” he said, “but it’s three more than you had before.”

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Tags: airline catering, airline food, airline passenger experience, american airlines, delta air lines, united airlines

Photo credit: SkyTender wants airlines to adopt its coffee machines. It was one of the many products on display recently at the World Travel Catering and Onboard Services Expo in Hamburg. Isha Maker / SkyTender

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