How much appetite do chocolate-loving Americans have for the chewy, colorful, sour and sweet non-chocolate candies known as gummy bears?
A lot, HARIBO of America hopes. Germany-based HARIBO, a 100-year-old private company, has been a driving force in building the now $1.7 billion gummy bear category in the United States. That’s a fraction of the total $22 billion, chocolate-dominated U.S. confectionery market.
But HARIBO’s Goldbears were “nothing” five years ago and now outsell Skittles, Starburst, Swedish Fish, and Sour Patch, says Wes Saber, CFO of HARIBO of America, who once worked with Mars to develop the chocolate segment in Europe, Russia, and the United States.
HARIBO ramped up its U.S. business plan in 2015 when it moved locations to confectionary capital Chicago. HARIBO of America now has fully-functioning sales, marketing, and finance teams, and has more than 20% of the U.S. gummy category.
Phase three is coming: HARIBO of America took a big step toward local U.S. growth last year when it announced a $300 million manufacturing facility in Pleasant Prairie, Wisconsin. The Haribo 487,400-square-foot production building along with other warehouses, offices, and accessory buildings on nearly 140 acres will create 385 direct jobs and 4,200 indirect jobs, says Saber, and will be completed in the fourth quarter of 2022.
After looking at more than 110 locations, the company entered into an enterprise zone agreement with the state of Wisconsin. HARIBO will be eligible for $22.5 million in tax credits, although Saber said it was offered more by governments in other locations. “The tax credit was only one variable,” says Saber. The community, educational institutions, available labor force, and a presence in the manufacturing corridor between Milwaukee and Chicago were equally important. “When we make choices, we make choices and decisions for the longer term,” Saber stresses.
Just as key to the U.S. business will be an SAP implementation for finance, commerce, and logistics that will go live this year as well as a data science project the company is embarking on with its business partners up and down the value chain.
The highly automated manufacturing and warehouse site will use machine-to-machine communication and the business will have access to real-time data from supply chain partners to make planning decisions on replenishment, inventory, inbound shipping to stores, and the like. “Behind all of that is the integrity of the master data and the maintenance of the data,” says Saber. “But the speed of execution is important.”
While HARIBO of America aims to be number one in the sugar confectionery category in the United States, it focuses on only growth it can support with high-quality products and service, says Saber.
“We want to leverage our global scale. But at the same time, operate as a local,” Saber says. “So, we want to bring the best of both worlds.”