Berenberg backs Avolta and SSP as U.S . air travel market growth accelerates

Investing.com -- Berenberg has reiterated its support for Avolta and SSP, pointing to the accelerating U.S. air travel market as the foundation for their growth. 

In a recent note, analysts said, “Our analysis of the US travel concession market suggests that food and beverage (F&B) concessions are faster growing than retail concessions, which leads us to prefer Avolta and SSP over WH Smith.”

The U.S. travel concession market was valued at about $11 billion in 2024, with food and beverage representing two-thirds and retail making up just over one-third. 

Avolta held a 34% share of the overall U.S. airport concession market, while SSP accounted for 8%.

Passenger growth underpins the sector’s expansion. Federal Aviation Administration data show enplanements rose from 807 million in 2015 to 974 million in 2024, a compound annual growth rate of 2.1% despite pandemic disruption. 

The FAA projects enplanements will reach 1.3 billion by 2035, reflecting a higher CAGR of 2.7%.

Berenberg highlighted infrastructure as another growth driver. “Our analysis shows that large US airports have delivered c$31bn of infrastructure projects since 2020, with a further c$42bn of projects scheduled to be delivered by 2030,” the analysts wrote. 

“The magnitude of this investment should enable broader access to air travel and support increased spend per passenger (SPP),” the brokerage said.  

Much of the investment is aimed at expanding terminal capacity and shifting outlets airside, where passenger spending is typically higher.

Food and beverage spending has consistently outpaced retail. Since 2019, food and beverage spend per passenger has grown 6%, while retail has declined 2.4%. 

By 2024, F&B spend was 70% larger than retail, widening the gap by 14 percentage points compared with pre-pandemic levels.

Avolta has moved to capture this trend. “Hybrid concepts (ie a unit offering both F&B and retail) represented 6% of its business development in 2023, 16% in 2024, and 26% in the H1 2025,” the brokerage noted. 

The company said hybrid stores could lift conversion by up to 20%. SSP, as a pure-play food and beverage operator, has also expanded its U.S. share from about 9% in 2019 to 13% in 2024. 

“We think this demonstrates the range of the company’s platform and its ability to respond to the growing demand for local and experiential concepts,” Berenberg said.

The analysts also pointed to changing travel dynamics, noting that low-cost carriers have boosted demand for airport dining as in-flight meals declined. 

“Looking ahead, we think that LCC airlines continuing to take share will be supportive of F&B SPP and hence positive for Avolta and SSP as it will lead to more consumer spending at F&B concessions within terminals,” the brokerage said.

Berenberg raised Avolta’s price target to CHF52 from CHF45 and maintained its Buy rating, describing the company as “the undisputed leader in the attractive US market.” 

SSP was upgraded to “buy” with a price target of 190p, up from 180p. WH Smith, by contrast, was downgraded to “hold” with a price target cut to 700p from 1,600p, after questions emerged over profitability despite projected revenue growth.