A very grand affair in Galgenen

by Martin Moodie |
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Martin Moodie

Martin Moodie is the Founder & Chairman of The Moodie Report.

Now this is what I call an Interim Moodie Davitt Report Bureau.

I’m staying at The Dolder Grand, a gloriously stately hotel just a few minutes yet seemingly a lifetime away from the centre of Zürich. Grand by name and – in the nicest rather than pretentious sense of the word – grand indeed.

Conclusive evidence that I do occasionally log off

I have been here for the opening of The Estée Lauder Companies’ (ELC) state-of-the-art new distribution centre in nearby Galgenen, designed specifically to accommodate the anticipated dynamic growth of its key global travel retail business.

Senior management from The Estée Lauder Companies perform the traditional opening rites to inaugurate the Galgenen distribution centre. Pictured left to right are Umair Ansari, VP/GM, Travel Retail EMA; Fabrizio Freda, President and Chief Executive Officer; Jane Lauder, EVP, Enterprise Marketing and Chief Data Officer; and Roberto Canevari, EVP, Global Supply Chain.

Key? Definitely. Just look at the numbers. The group’s business in the channel is estimated to reach over three billion customers annually. And if you want some hard statistics, travel retail contributed 28% of company net sales in fiscal 2021. That compares with just 6% in 2004, which by any measure represents transformational progress.

A spectacular panoramic shot of the Galgenen distribution centre 

The ELC team has done a fantastic job in organising this sizable gathering of VIPS, retailers, media, local government officials and company executives. Yesterday we had the rare chance to walk the usually off-limits distribution centre and while I am not allowed to show you any internal photos for obvious reasons, I can tell you that it is an astoundingly advanced facility in technological terms.

The solar panels on the roof of the Galgenen distribution centre generate 1600 kilowatts at peak performance

Giant yellow robots and automated product ‘pickers’; anchored by sustainability principles and practices; flexible; modular; vast. Can something as logistically focused and technologically based as a global distribution centre be beautiful? In its own almost futuristic way, yes. Except this is not the future. This is now.

Here’s another number and an important one, not just for ELC but for the whole travel retail channel. The centre will double the group’s output capacity for the channel. Alright, the facility was planned long before the pandemic but it does suggest tremendous confidence in travel retail going forward. Given the latest hugely encouraging numbers from the UNWTO and the fact that the ‘icing on the cake’ – the return of Chinese outbound travellers – is still to happen, the realities of the pandemic will not have blighted that confidence one jot.

As newly appointed ELC Travel Retail Worldwide Global President Israel Assa told me during a video interview on the eve of the opening [alas, he had been struck down with a certain well-known virus whose name contains the number 19], “The Galgenen distribution centre is a symbol of our belief in travel retail as an industry and as a channel for The Estée Lauder Companies.”

“It’s incredibly impressive… I mean, it’s an over 300,000sq ft facility so it’s massive. But it’s also flexible, it’s modular. It really means we are able to deliver a best-in-class experience from a supply chain perspective. And when we built it, obviously we built it with sustainability in mind. So that means everything in terms of renewable energy, best-in-class environmental design, being able to reduce energy and reduce water consumption.”

Nicely summed up. I’m sure I’ll be seeing plenty of ELC products on-shelf as my world tour, now on day 31 of 85, continues. Next stop London.

With (from left) TRBusiness Editorial Director Charlotte Turner; The Estée Lauder Companies Director, Travel Retail Corporate Affairs and Corporate Communications Michelle Choi-Kim; and Maud Smith, Vice President, Corporate Affairs / Communications, The Estée Lauder Companies EMEA
Sometimes you have to raise the bar. Or even get on the other side of it.
The Galgenen event attracted several of The Estée Lauder Companies’ biggest clients, including Dubai Duty Free. Here the retailer’s Chief Operating Officer Ramesh Cidambi chats with me and DFNI and Frontier Editor Kapila Ireland.
Also on hand were DFS Senior Vice President Beauty Amael Blain (left) and Aer Rianta International Global Head of Beauty Deirdre Devaney
With Gebr. Heinemann Vice President Global Supply Chain Inken Callsen and Dufry Global CCO Andrea Belardini