German gummi bear maker aims for bigger share of U.S. market
Woodlawn-based Haribo of America building brand with new TV campaign
"Gummies were known in Europe for a long time ... but the market potential has not been fully achieved in the U.S.," said Christian Jegen, president of Haribo of America Inc. (Baltimore Sun photo by Lloyd Fox / March 28, 2012)
And that appetite is growing, if Haribo of America Inc.'s sales are any indication.
U.S. sales for the Woodlawn-based division of the German candy maker have grown in double digits in each of the past five years, and more than 20 percent in 2011, said Christian Jegen, president of Haribo of America.
Known for inventing gummi bears, Haribo began mass-marketing the fruity, chewy candy in the United States in the 1980s.
Research from the National Confectioners Association that shows continuing adult consumption means that the kids who grew up with gummies in the 1980s are continuing to consume the candy as adults, said Susan F. Whiteside, an NCA spokeswoman.
"I'm 37, and I remember when gummi candy became popular in elementary school," she said. "Now, it's not just gummi bears, it's gummi worms and so many more flavors. They're constantly capturing a new audience."
Haribo of America sees even more untapped demand. From offices off Security Boulevard where visitors are greeted by life-size images of Haribo's logo, a gold bear in red bow tie, Haribo is building its brand with a TV ad campaign, expanding its reach in stores and dreaming up new versions of the snack that once came in just five flavors — lemon, orange, strawberry, pineapple and raspberry.
Despite higher raw-material costs, there's more opportunity in the gummi category, Jegen said. Consumers are looking for a fat-free, gluten-free candy alternative, he said.
"Gummies were known in Europe for a long time … but the market potential has not been fully achieved in the U.S.," Jegen said.
Candy sales have continued to fare well even in a difficult economy.
Confectionery sales rose 3.9 percent last year compared with 2010, and sales of chewy candy, Haribo's category, rose 3.1 percent, the NCA reported in December. About $29 billion worth of confections were sold in the U.S. in 2009, the latest dollar figures available, with nonchocolate candy making up about a third, the NCA reported.
"It's not a necessity, and it's not on the grocery list every week, but it brings happiness," Whiteside said. "Consumers continue to buy candy. It's not that expensive, not like taking a vacation or a new car."
While some candy has associations with holidays — chocolate bunnies and jelly beans with Easter, candy corn with Halloween — gummi candy sells well year-round, particularly during warmer months, when sales of chocolate slide, Whiteside said.
Gummi candies made by Haribo and other manufacturers have become big sellers for The Candy Store, a small 9-year-old retailer in Colonial Village Shopping Center in Pikesville, said Yehuda Nelkin, a manager and one of the owners.
"Once I saw what was going on with the gummies, we set one area of the store just for the gummies," he said. "The gummies sell 75 percent better than the rest of the candy. We sell pounds and pounds of it. When we have people coming in, there's a very good chance they're going to be buying some gummies."
The shop's two dozen varieties now include gummi bears, gummi dog bones, twin cherry gummies, mini fruit gummies and others. The retailer also gets orders from customers who serve gummies at "candy bars" at weddings and other parties as well as from ice cream shops that sell them as toppings, Nelkin said.
Before Haribo moved into the U.S. market in the early 1980s, its gummi candies were imported and sold mainly in specialty stores. Haribo has since expanded into supermarkets, drugstores and mass merchants such as Wal-Mart.
Wider distribution has spurred Haribo's rapid sales growth, said Jegen, who declined to disclose actual sales figures for the U.S. division.
With gummi bears as Haribo's top-selling U.S. product, the company is striving to become the dominant player in the gummi category among its many competitors, including big candy and food companies such as Mars and Kraft, and smaller private labels.