Business segments

Revenues by business segmentFood & beverage is the foundation on which the Group was built and for the concession market in general. Travel retail was subsequently developed to complement food & beverage, in order to offer greater service to travellers. Flight provides catering and retail services directly to airlines.

The size of the global travel retail & duty-free market is some $37bn1, while food & beverage grosses €15 to 20bn2 and flight around €7bn3. The size of the travel retail & duty-free market reflects a series of factors: the significant developments in transport infrastructure and services, an increase in per capita income resulting in new demands and new products for the traveller and the significant savings offered by duty-free shopping at airports.

Offering food & beverage and retail together, first in Italy and then in North America, enabled the Group to follow changes in customer profiles and to respond to demand with a uniform range of offerings (low-cost convenience items likely to be purchased repeatedly on impulse).

In 2005, recognising the business opportunity to cater more widely to travellers' needs by complementing its food & beverage operations with a new sector - travel retail & duty-free - the Group acquired approximately 50% of Aldeasa. Expansion in this sector continued in 2007 with the purchase of Alpha Group, which also marked the Group's debut in the flight business and again in 2008 with the acquisition of the remaining shares in Aldeasa and the outright acquisition of World Duty Free Europe.

1 Source: Generation, 2008 preliminary figures
2 Group estimates based on Gira figures
3 Group estimates

Food and beverageAutogrill first set up food & beverage operations along Italian motorways, expanding into other countries in the second half of the 1990s. The Group developed mainly through acquisitions, soon becoming one of the largest European food & beverage operators, with a presence in the railway channel as well. In 1999, with the acquisition of North American airport and motorway leader HMSHost, Autogrill became the world's number one provider of food & beverage services for travellers. A series of acquisitions and new contracts then strengthened the Group's position, by expanding its presence in geographical areas and channels where it had previously been less active (European airports) and giving it a foothold in new markets (motorways in Eastern Europe).

The food & beverage offerings are geared primarily to domestic travellers and are strongly influenced by the local palate, which is catered for with proprietary and licensed brands. The breadth of the brand portfolio and the ability to develop menus reflecting the local identity of each location is a key competitive advantage. Proprietary brands and recipes prevail in Europe, where cuisine is strongly linked to customs and traditions, while most North American offerings are under license. Autogrill's principal markets are Europe and North America, serving mostly motorways in the former and airports in the latter. In some European countries the Group operates at railway stations, but to a relatively minor extent. There are also food & beverage outlets in other places of transit, such as shopping centres, trade fairs, museums, and high streets.

In North America (United States and Canada), food & beverage is operated by HMSHost, which also serves Amsterdam Schiphol Airport in the Netherlands and a number of airports in Asia and the Pacific; in Italy by the Autogrill Italy division, and in other European countries - Austria, Belgium, Denmark, France, Germany, the UK, Greece, Ireland, Luxembourg, the Netherlands, the Czech Republic, Poland, Spain, Slovenia, Sweden, and Switzerland - by Autogrill's foreign subsidiaries.

Location Food & Beverage by geographical region

   North America and Pacific region*    Italy    Other countries    Total  
 Motorways  101 374 233 708
 Airports  98 13 27 138
 Railway stations     16 41 57
 Towns      35 3 38
 Shopping malls  17 77 23 117
 Trade fairs     17    17
 Other channels        1 1
 Total   216 532 328 1,076

* Refers to HMSHost activities in North America, in Schiphol airport (The Netherlands) and in some airports in Asia and Pacific region.

With the acquisition of Aldeasa, Alpha Group and World Duty Free Europe, Autogrill has become one of the world's leading airport retail operators.

The travel retail & duty-free business serves a mostly international clientele, with a core range of products consisting primarily of fragrances and cosmetics, spirits, tobacco products and confectionery. The decision to use specific brands at a given location depends on recognition (where relevant, as in Spain), endorsement strategies (e.g. specialised departments or corners for luxury clothing or cosmetics brands), or concepts zones developed to feature a category of goods to best advantage. The resulting "shop-in-shops" provide a unique and engaging shopping experience across product categories that would otherwise be separate. Similar to department stores in their layout, they combined duty-free or travel retail savings against high street prices, with the prestige of premium brand stores.

Europe is the principal market, with a strong presence in the UK and Spain, followed by the Middle East, the Americas and Asia. Airports are basically the sole business channel1.

The Group's travel retail & duty-free stores in the UK are operated by WDF which includes World Duty Free and Alpha's UK retail business. In Spain, other European countries, the Middle East, the Americas and Asia, travel retail and duty-free stores are operated by Aldeasa, which also operates Alpha's international retail business. The process of global integration of the Group's business in this sector began as soon as the acquisitions were complete and will be finished in 2009, when the retail business will be brought under a single roof.

Travel Retail & Duty-Free locations by geographical region

  Spain United Kingdom Other countries Total
 Airports  22 18 33 73
 Buildings and museum  31    9 40
 Total   53 18 42 113

1 The travel retail & duty-free segment also includes the operations located inside museums (Aldeasa), which represented about 1% of the 2008 segment revenue

Autogrill has operated in the flight business since 2007 following the acquisition of Alpha Group. Alpha Flight, a leader of the in-flight meals and snacks market, provides catering and retail services to over 100 airlines, including American Airlines, British Airways, Delta Airlines, Emirates and Ryanair in 11 countries of Europe, the Middle East, the USA and Australia.

Alpha Flight's traditional stronghold is the United Kingdom and Ireland, which accounted for over half of its operations in 2008. In recent years, the company has reduced its dependence on a single geographical region, through targeted development projects that have gradually expanded its presence abroad.

In-Flight locations by geographical region

United Kingdom and Ireland

Other Countries Total
In-flight 23 42 65
Total 23 42 65