How Does Avolta Company Work?

Avolta Bundle

Get Full Bundle:

	5 FORCES	$15	$10
	BCG	$15	$10
	CANVAS	$15	$10
	4P's MIX	$15	$10
	PESTLE	$15	$10
	SWOT	$15	$10

TOTAL:

ADD TO CART

How Does Avolta Operate?

Avolta is a major player in travel retail and food & beverage, significantly impacting the travel industry. In 2023, its turnover was CHF 12,789.5 million, with organic growth of 21.6%. By 2024, reported turnover reached CHF 13,725 million, an 8.9% increase at constant exchange rates.

With over 5,100 points of sale in 73 countries, Avolta is the top global travel retailer and holds the leading position in travel F&B. Its strategy focuses on revolutionizing the travel experience through diverse offerings.

Avolta functions by operating a vast network of retail and food & beverage outlets across travel hubs like airports and train stations. They offer a wide range of products, from duty-free items to specialty goods and various dining options, aiming to enhance the traveler's journey. This comprehensive approach allows them to capture a significant share of the travel retail market, as detailed in an Avolta Porter's Five Forces Analysis.

The Avolta company operations are centered around providing a wide array of travel retail and food and beverage solutions. These services are designed to enhance the overall travel experience for customers. The company's core offerings include duty-free shops, specialty retail outlets, convenience stores, and various food and beverage concepts such as cafes and restaurants.

Core Offerings

Avolta provides a comprehensive suite of travel retail and F&B solutions. This includes duty-free, specialty retail, convenience stores, and diverse F&B concepts like cafes and restaurants.

Global Reach

These services are delivered across more than 1,000 locations in 70 countries. This extensive network caters to a broad spectrum of travelers, from leisure tourists to business commuters.

Operational Excellence

Avolta's operational processes are built for efficiency, covering global sourcing, technology development, and logistics. Strong partnerships with concessionaires and brand suppliers are key to optimizing store layouts and passenger flow.

Customer-Centric Approach

The company emphasizes flexible, local, and engaging store formats, adapting to new trends and customer behaviors. In 2024 alone, Avolta launched over 20 hybrid concepts, blending retail and F&B for a richer experience.

The Avolta business model thrives on its ability to adapt and innovate within the travel retail sector. By leveraging data insights, the company customizes its offerings to meet the specific needs of travelers in each location, thereby boosting customer attraction and increasing spend per passenger. This customer-centric strategy, combined with operational efficiency and significant global purchasing power, allows Avolta to maintain a strong competitive edge. Understanding the Target Market of Avolta is crucial to appreciating how these operations translate into value.

Competitive Advantages

Avolta's operational efficiency and global sourcing capabilities provide substantial advantages. These strengths, coupled with robust relationships with suppliers and airport authorities, differentiate it from smaller competitors.

• Global sourcing and logistics optimization
• Strong partnerships with concession partners and brand suppliers
• Data-driven customization of offerings
• Development of flexible and innovative store formats
• Leveraging technology for enhanced customer experience

Avolta SWOT Analysis

• Complete SWOT Breakdown
• Fully Customizable
• Editable in Excel & Word
• Professional Formatting
• Investor-Ready Format

GET TEMPLATE ➔

Avolta generates revenue primarily through its extensive network of retail and food & beverage concessions located in travel hubs. The company's income is diversified across duty-free goods, duty-paid retail, and food & beverage services, creating a resilient business model.

Duty-Free Sales

This segment focuses on selling goods exempt from certain local or national taxes and duties to international travelers. It represents a significant portion of the company's turnover.

Duty-Paid Retail

This stream includes sales of goods where applicable taxes and duties have been paid, catering to a broader range of travelers. It accounted for 31% of core turnover in 2023.

Food & Beverage Services

The company operates various food and beverage outlets within travel locations, offering diverse culinary options. This sector made up 32% of core turnover in 2023.

Loyalty Program Integration

The Club Avolta loyalty program, with over 10 million members by the end of 2024, drives repeat business and accounts for more than 5% of annualized revenues. This program enhances cross-selling across all business lines.

Hybrid Concepts

Avolta leverages hybrid concepts that merge retail and F&B offerings. This strategy maximizes cross-selling potential and creates more promotional opportunities for customers.

Financial Performance

In 2024, consolidated reported turnover reached CHF 13,725 million, with core turnover at CHF 13,473 million, showing an 8.9% growth at constant exchange rates. The company also saw a 32% year-on-year increase in Equity Free Cash Flow (EFCF) to CHF 425 million in 2024.

The Avolta business model is centered on providing a comprehensive retail and dining experience within travel environments, aiming to capture a significant share of traveler spending. Understanding Avolta's revenue streams and profitability reveals a strategy built on diversification and customer loyalty. The company's operations span across 5,100 outlets, demonstrating its extensive reach and operational capacity.

Key Revenue Drivers

Avolta's revenue generation is driven by its strategic positioning in high-traffic travel hubs and its ability to cater to diverse traveler needs through a multi-faceted offering.

• Duty-Free: 37% of core turnover in 2023, capitalizing on international travel.
• Duty-Paid Retail: 31% of core turnover in 2023, broadening market reach.
• Food & Beverage: 32% of core turnover in 2023, offering essential traveler services.
• Loyalty Program: Contributes over 5% of annualized revenues, fostering customer retention.
• Hybrid Concepts: Enhance sales through integrated retail and F&B experiences.

Avolta PESTLE Analysis

• Covers All 6 PESTLE Categories
• No Research Needed – Save Hours of Work
• Built by Experts, Trusted by Consultants
• Instant Download, Ready to Use
• 100% Editable, Fully Customizable

GET TEMPLATE ➔

Avolta's journey is marked by significant strategic moves, most notably the 2023 business combination of Dufry and Autogrill. This pivotal event reshaped the global travel retail and F&B landscape, demonstrating Avolta's ambition and operational prowess. The company has already realized substantial financial benefits from this integration.

Key Milestones and Synergies

Avolta achieved CHF 30 million in synergies in 2023. The company anticipates full run-rate synergies of CHF 85 million by 2024, a year ahead of schedule. This rapid realization of cost and operational efficiencies underscores the success of the integration.

Global Expansion and Market Penetration

The company continues to expand its global footprint, entering new markets like Saudi Arabia at King Khalid International Airport. Further expansion is planned for Tunisia in 2025 across five major airports. In Latin America, Avolta has strengthened its cruise channel presence and introduced its first F&B concept.

North American Growth and Strategic Contracts

In North America, Avolta secured significant contracts at JFK Airport in late 2024. These include a 15-year F&B contract in Terminal 4 and an extended F&B contract in Terminal 5, highlighting its strong position in key travel hubs.

Competitive Advantages: Scale and Integration

Avolta's competitive edge is built on its massive scale, operating in 73 countries, and its integrated travel retail and F&B offering. This scale provides significant purchasing power and logistical advantages.

Avolta's 'Destination 2027' Strategy

The 'Destination 2027' strategy focuses on revolutionizing the travel experience through innovation in business development, commercial operations, and digital transformation. This includes expanding hybrid concepts and enhancing the Club Avolta loyalty program. This strategic vision is supported by Avolta's NEXT innovation hub and its internally developed AI tool, Avolta GPT.

• Enhancing the 'Travel Experience Revolution'
• Innovative business development and commercial strategies
• Digital transformation initiatives
• Expansion of hybrid concepts
• Growth of the Club Avolta loyalty program
• Leveraging Avolta GPT for AI-driven support

Understanding Growth Strategy of Avolta is crucial to grasping how the Avolta company operates and its overall business model. The company's approach to customer engagement and its role in the digital transformation landscape are key components of its success.

Avolta Business Model Canvas

• Complete 9-Block Business Model Canvas
• Effortlessly Communicate Your Business Strategy
• Investor-Ready BMC Format
• 100% Editable and Customizable
• Clear and Structured Layout

GET TEMPLATE ➔

Avolta has solidified its position as the leading global travel retailer and food and beverage provider, a status it held in 2023. In the US travel retail market, the company commanded an estimated 33% share in 2024, underscoring its significant influence. This market dominance is further supported by its expansive operational footprint across 73 countries, encompassing over 5,100 points of sale, which directly contributes to how Avolta works by providing a vast network for its services.

Industry Position

Avolta is the number one global travel retailer and food and beverage operator. In 2024, its market share in the US travel retail sector was approximately 33%. The company operates in 73 countries with over 5,100 points of sale, demonstrating its extensive global reach.

Key Risks Identified

The company faces risks from global uncertainties, geopolitical events, and economic downturns. Shifting consumer preferences and evolving travel retail trends also present challenges. For instance, Avolta saw a decline in like-for-like sales in Latin America in 2024.

Future Growth Strategy

Avolta's 'Destination 2027' strategy targets 5% to 7% annual organic growth. It also aims for annual improvements in core EBITDA margin and increased Equity Free Cash Flow conversion. This strategy outlines how Avolta works to achieve sustained profitability and expansion.

Strategic Initiatives and Shareholder Returns

The company plans to leverage strong passenger growth trends, with global air traffic expected to double by 2042. Initiatives include business development, digital transformation, and investments in hybrid concepts and its loyalty program. Avolta also plans a share buyback of up to CHF 200 million for 2025 and a proposed dividend increase to CHF 1.00 per share.

Navigating Challenges and Future Investments

Avolta's business model is designed to adapt to industry volatility, including regulatory changes and sustainability considerations like 'greenwashing'. The company's commitment to innovation and customer engagement, as detailed in the Marketing Strategy of Avolta, is key to its long-term success. Understanding Avolta's revenue streams and profitability is crucial for assessing its resilience.

• Anticipated organic growth: 5%-7% annually.
• Targeted EBITDA margin improvement: 20-40 basis points annually.
• Projected EFCF conversion increase: 100-150 basis points annually.
• Planned share buyback: Up to CHF 200 million in 2025.
• Proposed dividend for 2025: CHF 1.00 per share.

Avolta Porter's Five Forces Analysis

• Covers All 5 Competitive Forces in Detail
• Structured for Consultants, Students, and Founders
• 100% Editable in Microsoft Word & Excel
• Instant Digital Download – Use Immediately
• Compatible with Mac & PC – Fully Unlocked

GET TEMPLATE ➔