CASE STUDIES

Haribo Case Study
Reinvigorating the sugar confectionery market by focusing on health and comfort trends
Reference Code: CSCM0273 Publication Date: September 2009

DATAMONITOR VIEW CATALYST
This case study looks at Haribo and how the company has addressed key challenges in the sugar confectionery sector. The firm is one of the leading players in the European market, but has had to adjust its business strategy to be in line with consumer demands for healthier food. In addition, the sector is experiencing a boost in adult consumers due to growing nostalgia and comfort trends.

SUMMARY
• The European sugar confectionery market is worth over $24 billion, but growth has been slowing due to increasing consumer awareness and concern over health issues. This has prompted the sector to address health trends with products that are less calorific and have fewer artificial elements. • Haribo is one of the longest serving and leading companies in the sugar confectionery segment, which has long focused on marketing to both adults and children. With new restrictions on advertising and growing concern over health, the company is targeting adults more with advertising designed for this purpose. • The company is addressing the health trend with the new Haribo Lite range of candies that are less calorific and healthier than its conventional products. The latter have also been overhauled to be healthier and now feature no artificial colors. In addition, Haribo has an opportunity to address the nostalgia trend more clearly to prevent its competitors from stealing its adult customers and gaining market share.

Haribo Case Study
© Datamonitor. This brief is a licensed product and is not to be photocopied

CSCM0273/ Published 09/2009 Page 1

553 24. US$ m. Datamonitor defines the sector as including the following categories: caramels and toffees.426 3.226 3.519 1.4% Source: Datamonitor's Market Data Analytics DATAMONITOR Manufacturers have responded to the slowdown with products that are focused on health and comfort In order to enhance the growth rate of the sector.293 3.747 3.591 29. Germany and the UK (see Table 1).4% 9.811 1. gums and jellies. highlighting the impact of consumers' concern that candies are bad for their health (in that they are generally regarded as being high in sugar and artificial colors and flavorings). with the largest regions in terms of value being in Russia. the value of the sector is forecast to have a falling or static growth rate in the 2008–13 period.099 3.Haribo Case Study ANALYSIS The sugar confectionery sector is addressing health and comfort trends to reverse falling growth Growth in the sugar confectionery sector is slowing due to consumers' growing concern for their health The European sugar confectionery sector was worth a substantial $24.7% 3. Table 1: Leading countries for sugar confectionery in Europe by value. are attempting to make confectionery appeal to adults as well as children by marketing its nostalgic allure (and therefore addressing comfort trends) to maximize their potential consumer base.435 1. regular mints and other sugar confectionery.9% 2.143 3.0% 1.8% 1. in addition. Haribo Case Study © Datamonitor. hard boiled sweets. In the top five leading European countries.5% 1.017 2.4% 0.2% 1.8% Europe overall 20.909 1.463 3.6 billion in 2008. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 2 .341 7. medicated confectionery.4% 11. 2003–13 Industry Region 2003 2008 2013 CAGR 2003–08 CAGR 2008–13 Sugar confectionery Russia Germany UK Ukraine France 4.1% 4. power mints. sugar confectionery manufacturers are addressing consumer concerns over health by launching healthier candy options and.466 5.207 5.162 2.

In addition. showing that manufacturers are concentrating on removing two often criticized elements from their products. Figure 1: Health claims dominate the leading claims of the past year in European sugar confectionery launches Top five claims in new sugar confectionery launches in Europe. The leading claims show that manufacturers are keen to enhance their reputation among consumers and encourage them to continue purchasing their products for both themselves and their children by improving the healthiness of the products. the sector is still highly focused on marketing its products to children. which sells sweets such as cola bottles and sherbet lemons. The leading claims for the year to August 2009 was 'no sugar'. highlighted by the presence of the 'kids' tag in the top five leader board. the trend has been seen in the wider confectionery market. discontinued brands such as Wispa and Haribo Case Study © Datamonitor. August 2008-09 90 80 70 60 50 40 30 20 10 0 No Sugar No Artificial Color High Vitamins Kids No Artificial Flavor Source: Datamonitor's Product Launch Analytics Number of SKUs DATAMONITOR A significant proportion of Europeans are choosing foods that comfort them As well as health. manufacturers are focusing on comfort and nostalgia trends to encourage more consumers to purchase their products. Meanwhile. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 3 .uk. which shows that four of the top five claims in new product launches have a health focus.Haribo Case Study Leading claims in sugar confectionery have a focus on health Highlighting the fact that European sugar confectionery manufacturers are focusing on enhancing the healthiness of their products is the chart shown in Figure 1. This has been witnessed by the emergence of old-fashioned sweet shops both on the high street and online. followed by 'no artificial color'. where in the UK.co. most notably the UK online store aquarterof.

but nonetheless around a quarter of consumers in Germany. This was especially the case in Russia.Haribo Case Study Drifter have been successfully revived. where 44% of survey respondents said that they were choosing these products more or significantly more frequently. Figure 2: A significant proportion of Europeans are growing more interested in comfort foods Question: In the past six months. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 4 . especially during the current poor financial climate. August 2008 Haribo Case Study © Datamonitor. Russia Spain Sweden UK 26% 17% 26% 11% 24% 17% 23% More or s ignificantly m ore No change Les s or s ignificantly les s DATAMONITOR Source: Datamonitor's Consumer Survey. Italy. please indicate to what extent you have done the following more or less frequently: Chosen comforting food and drinks 100% 90% 80% 70% % of respondents 39% 14% 27% 12% 25% 17% 11% 20% 20% 60% 50% 40% 30% 69% 48% 62% 65% 64% 64% 57% 44% 20% 10% 0% France Germany Italy Neths. Spain and the UK were more frequently choosing comforting foods. while Starburst candies briefly changed to their original Opal Fruits branding. Other European respondents were less enthusiastic about them. showing a significant portion of society has a growing interest in these products. Such revivals aim to capitalize on the nostalgia trend among adults for sweets from their childhood. Datamonitor consumer research found that a significant proportion of European consumers were choosing comforting food and drinks on an increasing basis (see Figure 2). as these offer the potential to provide comfort.

Source: Haribo. while producing its goods in five factories in Germany and 13 elsewhere in Europe. Liquorice Favourites (including Liquorice Wheels and Liquorice All-Sorts). It is now run by the founder's two sons.6% share. The company's product line now includes an extensive line of sugar confectionery. Eggstras.Haribo Case Study Haribo is a leading brand in the European sugar confectionery sector that has been successful in targeting both adults and children One of the leading European sugar confectionery companies is Haribo. Kiddies Super Mix. Happy-Cola. and Tropifrutti. The company has grown internationally over the years. which achieved substantial sales of $715m in 2008. and the leading company in the region. There are also sales offices in almost every European country and in the US. has only an 8. The company's success has been achieved by addressing health and comfort trends. with a market value share of 5. demonstrating its strong international presence.com DATAMONITOR Haribo Case Study © Datamonitor. Fizzy Cola. while remaining under the ownership of the Riegel family. Figure 3: Haribo has factories and sales offices around Europe and the US. including the following: Gold Bears (the company's first mass-produced product and logo). Starmix. being made up of many small players. entering the US market in 1982. the sector is quite fragmented. Haribo is the fourth strongest company in the European sugar confectionery sector. However. Germany in 1920 by Hans Riegel (the name is an acronym for Hans Riegel Bonn). Haribo was formed in Germany in 1920 and has grown strongly in international markets Haribo is a long-term player in the sugar confectionery market. Cadbury. being formed in Bonn. Haribo currently exports its products to more than 105 countries. but exports globally In addition to five production works in Germany.4%. Pasta Frutta. which have enabled it to tap into a growing consumer base of both adults and children. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 5 . As shown in Table 2. Hans and Paul Riegel. Fantasy Mix. The company also has sales offices in almost every European country and in the US. Build-A-Burger. today HARIBO has 13 other factories in Europe.

0% 3.Haribo Case Study Table 2: Leading five players in the sugar confectionery market in Europe.2% 0.9% 2.1% 1.1% 5.1% 5.5% 0.5% 0.3% 0.4% 1.6% 2. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 6 .2% 0.5% 6.9% 0.9% 1.5% 6.4% 2.4% 0.2% Source: Datamonitor's Market Data Analytics DATAMONITOR Haribo Case Study © Datamonitor.6% 0. KG Others Haribo Happy Cola Leaf International Others Leaf Lakerol Red Band/Venco Villosa Chewits 8.1% 0.8% 0.2% 2.8% 0.1% 0.6% 0. 2008 Company Brand Market value share Cadbury Plc Trebor Bassett Kent Wedel Adams Cadbury's Others Halls La Pie Qui Chante Saila Kiss Cool La Vosgienne Clorets Hacks Babayevsky Confectionery Concern OAO All Perfetti Van Melle Others Mentos Chupa Chups Fruitella Frisk Smint Rocky Fruiteros Haribo GmbH & Co.3% 0.8% 1.0% 0.1% 6.1% 0.2% 0.1% 0.1% 0.5% 0.0% 0.

Adult consumption of sugar confectionery is also acknowledged by the current generation of Haribo: "Gums and jellies consumption isn't just confined to children. the happy world of Haribo. managing director of Haribo Dunhills (the UK division).” This highlights how the company has long recognized that adults enjoy consuming sweets as they have a comforting element that reminds them of their childhood. Haribo recognized early on in its formation that there was an opportunity to market its products to adults as well. it found that seven out of 10 adults aged 16 to 44 and six out of 10 in the 44–64 age group like to buy them. Of course." Herwig Vennekens. They remind adults of their childhood in a positive way. Haribo would argue that its products are treat items that are not meant to be consumed in large numbers on a daily basis. sugar and salt products to children. Haribo can lessen criticism that it is marketing an essentially unhealthy product to children. the company changed its German advertising slogan “Haribo makes children happy”. According to ACNielsen research in 2008. 2008 Haribo has changed its marketing strategy in line with stricter regulations by focusing more on the adult consumer By focusing on the adult consumer as well as children. adult levels of penetration within the gums and jellies subsector are only slightly lower of those of children: where 80% of children aged five to 15 enjoy eating them. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 7 . The English version was also changed. adding to it the phrase “and adults too”.Haribo Case Study Figure 4: Haribo has an extensive sugar confectionery portfolio in Europe Source: Datamonitor's Product Launch Analytics DATAMONITOR The company has a longstanding focus on marketing to both children and adults While sugar confectionery is traditionally associated with being consumed mainly by children. However. Haribo Case Study © Datamonitor. as quoted in The Grocer. Haribo has had to respond by targeting its marketing more towards adults than children. Recent research highlights how much adults enjoy sweets. to: “Kids and grown-ups love it so. In the mid-1960s. with various countries banning the advertising of high fat.

The ban included foods that are high in fat. a new range of fruit-flavored and fruit-shaped gums that contain no artificial colors.Haribo Case Study The company has addressed restrictions on marketing to kids by directing its TV adverts towards adults Haribo faces restrictions on advertising its products to children in many countries. when it began removing artificial colors from its gums and jellies. saw a man being interrogated by his young daughter over who ate all the 'fried eggs' from a Haribo's Starmix bag. in line with consumer concern over obesity and health-related issues. Haribo introduced Haribo Lite. In 2007. The advert is a tongue-in-cheek way of showing that adults often eat sweets secretly to conceal their liking for them. salt and sugar and so covers sugar confectionery. 2008 Haribo Case Study © Datamonitor. 30% fewer calories than its conventional products and 40% less sugar. only 0.1g of fat per 100g. In the UK. regulator Ofcom outlawed the advertising of 'junk food' on TV during dedicated children's programs. where restrictions are less stringent. This followed the company's more extensive overhaul of its products in 2006. Consumers are now looking more closely at the nutritional content of all products. Interesting to note. An advert for the brand from 2009. Haribo has also focused on enhancing the healthiness of its products. Such a response shows how the company is keen to address consumer issues in order to retain a healthy bottom line. The company has addressed the health trend with the new Lite range and by reviewing its product ingredients Along with addressing marketing restrictions. all Haribo bags of gums and jellies produced in the UK used non-artificial colors. showing how it aims to be a responsible company even online. in 2006. Haribo has moved its kids marketing online where regulations are less stringent While Haribo faces advertising restrictions on TV. By January 2008. and manufacturers have responded by introducing 'healthier' products. is the fact that the company is keen to point out that these sweets come in "portioned controlled bags". for example. as quoted in The Grocer. This style of advert could appeal to parents and adults in general who secretly enjoy sweets and could encourage more consumption among this consumer type. Haribo started advertising its products on TV in a way that would appeal to adults. however. The company runs the Haribo Club. which people can apply for online and in the UK enables anyone "from three to 103" to receive newsletters and sweets five times a years." Herwig Vennekens. "Confectionery is very much under scrutiny because of widely publicized concerns over obesity. In response. it has more freedom to promote its products to children on the internet. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 8 . managing director of Haribo Dunhills. and adult programs that could appeal to children.

the firm could change its packaging to focus more on this. As noted previously.uk. Rowntree Randoms. have opened to capitalize on growing demand for nostalgia sweets. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 9 . recent regulations have made it more important to focus on adult marketing. Thorntons has introduced a Sweet Shop section to its website that sells sugar confectionery. targeting adults with a nostalgic product.Haribo Case Study Haribo could capitalize on the nostalgia trend but faces competition from others keen to exploit this While Haribo has successfully addressed the health trend. which entered the UK market in 2009. The brand could take market share away from Haribo. Such a focus could enable it to compete more strongly against a recent rival to the brand. the company has an opportunity to take this further by addressing nostalgia trends. the company could possibly enhance business by focusing more on nostalgia. and is therefore one the company needs to be wary of. attracting adults to the brand who would normally purchase Haribo. various online sites such as a quarterof. which could safeguard its position against new entries into the sector and see it become an all-round player loved by every age group. introducing a line that has packaging designed to appeal to adults and their desire to reminisce about their childhoods. In addition. alongside high street stores. Haribo Case Study © Datamonitor. In particular. The product is being marketed to appeal to adults rather than children as a fun-loving brand that reminds them of the sweets of their youth. such as cola bottles and gummy bears. However. Figure 5: Rowntree Randoms and Thorntons Sweet Shop are new rivals to Haribo's sweet confection range Rowntree Randoms and Thorntons Sweet Shop were both launched in 2009. While it has long maintained that it is positioned towards both adults and children. Source: Datamonitor analysis DATAMONITOR Conclusion Haribo continues to perform strongly as a main player in the European sugar confectionery market. As these of the kind of sweets Haribo produces.co. The company's introduction of the Lite range and its health overhaul of its portfolio show how it is responding positively to consumers' criticisms of the sector and their overall health and obesity fears. it could focus more on the nostalgia trend to encourage more consumption among adults.

Marketing Week. DMCM4693 Datamonitor (2009) Sprinkles Case Study: capitalizing on the comfort trend with an everyday treat offering. Talking Retail. Each case study provides a concise evaluation of a company that stands out in some area of its strategic operations. The Grocer. Methodology This case study was compiled using a collection of both primary and secondary research. January 2009 Sugar rush. banking and insurance. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 10 . highlighting the ways in which the company has become one of the best in its field or how it deals with different problems encountered within that sector. February 2008 Further reading • • Datamonitor (2009) Global Consumer Trends: Sensory. which explores business practices across a variety of disciplines and business sectors. The Grocer. DMCM4691 Datamonitor (2009) Lifestyle & Socialization Trends in Childhood: Implications for CPG. In addition to this. July 2009. May 2009 Sweetness & light. June 2009. writing this case study also involved researching innovative product formulations on Datamonitor's Product Launch Analytics Database. including Datamonitor’s own consumer survey fieldwork. July 2009. pharmaceuticals and software. CSCM0252 • • Datamonitor (2009) Global Consumer Trends: Health. Secondary sources • • • • Nestlé UK to roll out Rowntree Randoms. The series covers a range of markets including food and drink. April 2009. retail.Haribo Case Study APPENDIX Case study series This report forms part of Datamonitor's case studies series. DMCM4670 Haribo Case Study © Datamonitor. April 2008 Haribo. alongside an extensive review of secondary literature and other in-house sources of information such as Datamonitor’s Market Data Analytics tool.

As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. mechanical. Datamonitor’s consulting team may be able to help you. No part of this publication may be reproduced. For more information about Datamonitor’s consulting capabilities.com Datamonitor consulting We hope that the data and analysis in this brief will help you make informed and imaginative business decisions. conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources. Datamonitor. electronic. Please note that the findings. whose accuracy we are not always in a position to guarantee.Haribo Case Study Ask the analyst The Consumer Knowledge Center Writing team askcm@datamonitor.com. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. recording or otherwise. Haribo Case Study © Datamonitor. please contact us directly at consulting@datamonitor. If you have further requirements. photocopying. stored in a retrieval system or transmitted in any form by any means. without the prior permission of the publisher. Disclaimer All Rights Reserved. This brief is a licensed product and is not to be photocopied CSCM0273/ Published 09/2009 Page 11 .

users may print.Copyright of Haribo Case Study: Reinvigorating the Sugar Confectionary Market by Focusing on Health & Comfort Trends is the property of Datamonitor Plc and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. or email articles for individual use. . download. However.