German gummi bear maker aims for bigger share of U.S. market

Chew on this: Adults — not children — account for 65 percent of gummi candy consumption in the United States.

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.

About two years ago, Haribo began working with Baltimore-based advertising agency TBC to better familiarize U.S. consumers with the brand. Company executives wanted adults and children to think "fun" when they think of Haribo. The company already had a decades-old jingle that it translated into English as "Kids and Grown-Ups Love It So, The Happy World of Haribo."

Above all, Jegen said, the company wanted a campaign that would distinguish Haribo gummies from the competition.

"Texture and flavor distinguishes them," he said. "They are true to nature. If you're eating peach, it tastes like peach."

Jegen approached Allan Charles, TBC's chairman and creative director, about creating the first national television commercial for Gold-Bears.

"We spent a lot of time talking about who they are," Charles said. "The big challenge for us was to adapt what we could of their tone into the pop culture of America. There's a childlike quality to the brand. We showed them a number of ideas. They liked the idea of kids running the show."


The television spot was created in TBC's Fells Point offices and produced across South Wolfe Street in the agency's film studio. The commercial shows kids in the boardroom running the company. The young "executives" tout the "fruitier, chewier, tastier," attributes of Haribo bears, until the "president's" mom interrupts the meeting and is asked to address her son as "Mr."

A newer commercial started airing in February showing a team of elementary school-age kids running the factory and figuring out how to fill the biggest gummi bear order ever. The ads, run during children's shows on cable channels such as Nickelodeon, Animal Planet, Disney Channel and Cartoon Network, have been paired with a new Facebook page and candy sampling events.

"Kids running the factory is endearing to everyone," Charles said. "Kids like it. What a great fantasy to run a candy factory. And the mom is in it for the family values."

Privately owned Haribo has been run by generations of one family since founder Hans Riegel started the company in Bonn in 1922. He formed the name using the first two letters of his first and last names and the German city. The company started with gummi bears, though they were bigger than today's version.

It's since grown into the world's eighth-largest candy company, with $2.9 billion in annual sales. It's the largest maker of gummi candy, licorice and marshmallows in the world, with 15 factories in Europe. The U.S. division opened in downtown Baltimore in 1982 and moved in 1989 to Woodlawn, where 14 employees oversee distribution in the U.S., Mexico and Caribbean.

In the U.S., the company mostly sells gummi candies, which now include products such as Happy Cola, liquid-filled gummi candy and tropical-fruit-flavored candy.


Haribo has found a growing sweet spot, sticking to just a few product categories, a strategy it plans to maintain.

"We don't go out and sell chocolate," Jegen said. "We like to do a couple of things really well."