In the fall of 2021, Rick LaBerge, Chief Operating Officer of HARIBO, joined Candy Industry Editor Crystal Lindell for an episode of Confectionery Conversations, the podcast by Candy Industry.
LaBerge discussed supply chain issues, pandemic shopping behaviors, the new factory planned for Wisconsin, and new product strategies. The audio of the conversation is linked above, and below you’ll find a full transcript of the conversation.
Crystal Lindell: Hello, and welcome to another episode of Confectionary Conversations, the podcast by Candy Industry. I'm your host, Crystal Lindell, editor of Candy Industry. Today we are speaking with Rick LaBerge, chief operating officer at HARIBO of America. Hi. Thank you so much for joining us today, Rick.
Rick LaBerge: Oh, thank you for including me. This is going to be a very interesting podcast.
Crystal: So can you tell us a little bit about yourself? Tell us what you do at HARIBO, kind of tell us a little bit about your background and that kind of thing?
Rick: Sure. Let me start with HARIBO. So it's a pretty important time right now. We're just celebrating our100-year anniversary, so a very good milestone for the company. My role is chief operating officer. Simply, I work on creating demand. So, it's with consumers, so they understand who HARIBO is. We have a wide array of different gummi treats around the world. And then I also work with our retailers so that consumers can find our product, and being an impulse brand, it's very important to be part of the seasons because we want to be part of the rituals. But also, if you think about the floor plan of a retail store, we want to make sure that we're right near those high traffic areas. So, the combination of creating demand with consumers and retailers is what keeps me up at night and gets me up in the morning.
And you also asked me to say a little bit about HARIBO. I mentioned that we're celebrating our 100-year anniversary, and we've been creating childlike happiness for moms and dads. Our tagline is “Kids and grownups love us so.” So, we love that the DNA around the brand's quirkiness is to bring joy and happiness. The U.S. consumer, especially over the last 10 years, has very much embraced gummi and embraced learning more about HARIBO. Obviously, we’re known for our gummi bears. Now, the consumers are starting to see our different flavors and textures. We added marshmallow, and we can even add licorice. And now seeing what we've been able to do in the seasons is very exciting, so we can become part of the rituals of Americans.
Crystal: So the Passport Mix, I think, had a lot of different textures in it. Is that correct?
Rick: Yeah. And I know sometimes your timing is perfect, but we did that last — two summers ago — right in the midst of the beginning of COVID, when people couldn't travel and most Americans love to see different parts of the world and taste the different tastes and learn different textures. So this Passport Mix was our top sellers from the UK, from Germany, from Brazil, and we mixed it together and brought it to the shelves around the United States; it did amazingly. And actually, we got called out by Jimmy Fallon because he saw it, and it really created an internet buzz. It was really nice respite two summers ago when things were a little — not that they're not now — but when they were crazy.
Crystal: I know. We actually had a story about it, and it was one of our most popular articles for like months because there's just so much interest in it.
Rick: And it really helped us because one of the journeys we’re on is really exposing HARIBO to Americans. And I think I mentioned it just a moment ago: people say, "Oh yeah, you guys make gummi bears." And there are quite a few others, obviously with a thousand items in our kitchen in Germany, and we like to adapt those and bring them, so they match the U.S. consumers’ tastes and wants. So, by putting that mix together all in one bag, it really gave the consumer the chance to try some other varieties.
Crystal: I do feel like I'm noticing the HARIBO section of the local stores kind of growing outward, more and more, every time I go. And more and more products, I'm seeing a lot of HARIBO stands with like a bunch of variety, so I'm assuming that's a planned situation.
Rick: Yeah. We have been able to make a commitment to build a factory in Wisconsin. We could talk a little bit more about that, but that allows more product to be made locally, which allows us to have fresh product on the shelf. So this expansion in production is matching the expansion that you notice. Thank you for noticing. And one thing you probably also noticed, Crystal, is all the products have a different colors. So we're trying to create almost like a candy store amongst the products when they show up at the checkout at Walmart or Walgreens or in a Mariano's. So that childlike happiness in gold means, Goldbears, green means Twin Snakes, blue is for Star Mix. A little different than some of the other candies where you have a theme or the whole product line is orange, or the whole product line is blue. So, it's that little quirkiness that I mentioned at the beginning that comes to life with our packaging. And we also always have a window so that you can see the product. We're so proud of them. We present them in a way that you can understand the detail.
Crystal: So, I know you've kind of mentioned a little bit about COVID. Can you just talk a little bit, I think, it's on everyone's mind, how things have been going with the pandemic? Maybe some of the challenges and just what you guys are looking forward to, and anything that's going on with that situation?
Rick: Do you mind, I would love to start with my team. I am so proud. I think it was what, March 12th or 13th, where we said, "Hey, let's work from home for a couple of days. See where it goes." And that was not last March, but two Marches ago. And since that day, we've transferred all of our activity to being remote. We do now come together for collaboration days. Our office is open, but we are very conservative on the number of people that are in there. Employee and associates safety is our number one priority, but I'm very proud of how well they've adapted to working remotely. It’s really cool to see people really getting energy from coming back together. We have a saying, “Remote was remarkable, but we're better together.”
So anyway, starting with the associates, we are very proud of what they've been able to do. And now we're slowly coming back to where we can be together again.
Regarding consumers, I'll tell you, I felt like we had a mission to provide joy because this was really difficult for individuals who couldn't see family members, couldn't celebrate the way that we just love to celebrate. So, you probably see this, being an expert in the candy industry. Candy was very resilient through all this. It played an emotional role to help people kind of live day by day. And every couple of months, there's a different outlook for the pandemic and consistently candy. Even though it was bought in different parts, different retail stores, because we weren't comfortable going for a big store or a convenience store, either way, candy was resilient, and we were at the top of the list. And I think the reason being is people needed a little bit of happiness and joy, and if a small bag of Goldbears can do it, then that's our job.
Right now, our biggest challenge is supply chain. Like everyone, Crystal, you're probably like us. You try to order something online and it takes longer than you think, or it's not complete. We're working very hard. All of our product right now is imported from six different countries. I mentioned that we're building a factory in Wisconsin, but it's not open yet. So the ports are congested. The same situation that we have here in the U.S. with people feeling comfortable working in those kinds of situations. And it's causing us frustration. We're used to having around a 99 percent fill rate, and we're not there right now. So we're putting a lot of focus on trying to get the supply chain [fixed].
Crystal: So, when is the Wisconsin factory supposed to open?
Rick: So, if you drive by, because I know you're in Northern Illinois, if you get off the highway there right by the outlet mall in Kenosha, the building is done. The shell of the building is done. We're working on the interior starting next month [Note: Conversation was recorded in Sept. 2021, and the interior was slated to start in October of 2021] and we're going to start making company gummi bears one year from now. And then at the beginning of ‘23 is when we'll start shipping them to retail. So stay tuned. Made in America gummi bears are coming soon.
Crystal: I mean, it sounds like it's good timing like you said. I know everybody is struggling with supply chains. So, has that been kind of more of a problem, like in the last couple of months, or has that been all throughout the pandemic? Can you speak to that a little bit?
Rick: It's ebbed and flowed. At the beginning of a pandemic, what was more of the issue was the rate consumers went to different retail stores immediately without notice to all of us. And maybe this was your own shopping behavior. You immediately went to Instacart or you immediately went online. So that imbalance getting the pegs full at retail really happened based on shopping food chains.
It is probably in the last six months where we've been having more trouble with trucks and truck availability with container ships, as ports started to open and demands around the world brought containers to different parts of the world. That's what's been our biggest challenge in the latest six months. And keep in mind that goes all the way from your raw materials in your corrugated and sugar. Supply chain looks great when it flows, but it doesn't work when you have highs and real lows, but we are seeing the light at the end of the tunnel. And once again, I think I said it, we just always put safety first, associate safety so that we can make the best quality product we can.
Crystal: I don't know if you can speak to it, but I know there's a lot of concern about inflation and pricing problems because of the supply chain issues. Is it impacting your prices on either your raw materials side or your finished goods side, or if you can talk about that a little bit?
Rick: Yes, it is. If you can read it, it's impacting us in all different ways between transportation, cost increases, and packaging. You said them all actually, retail, packaging and transportation. We're balancing that with our value for money. We have a significant amount of our product that is sold to consumers at $1. And you go back to what I was saying at the beginning, we're really working hard on gaining new households, introducing our brand to moms and dads who may not have known HARIBO or known all the different array of products. So, we're working hard not to have those kinds of increases impact what you see on the shelf. And we haven't, we've been successful. We haven't price increased so far through the pandemic.
Crystal: So speaking of products on the shelf, there's actually data showing that during the pandemic, candy product launches were down, because companies were holding back on some of their new items that they wanted to launch. Can you talk a little bit about how you guys have handled that? It sounds like you're introducing a lot of products to the U.S. market and how you handled navigating that while, like you said, consumer behavior is changing month to month. It seems like, at this point, any other recent or upcoming launches that you guys have to?
Rick: We actually have been successful and actually accelerating our innovation. So we launched two new products last year. One of the highlights for us is Funtastic Mix, which is very playful, and has 14 different shapes, introducing foam and gummi together. It’s doing extremely well right now in the marketplace. And upcoming, we are going to be launching Rainbow Worms. And you mentioned, you like sour products, we're launching Sour Kicks. So let me talk about Rainbow Worms first; it's one of the only gummies out there with five different colors in the worm shape. A really playful, really adorable shape of this worm.
And then, you mentioned you like sour products; the Sour Kicks are undusted. So, I don't know if you've ever tried our Twin Snakes, but one snake is sweet, one snake is sour. Envision the sour portion of that is all you get in the really detailed sneakers. And it's really unique because it doesn't have a dusting. Usually, a candy company can achieve that sour that you like, that proper taste, with dusting on the outside. We've been able to put that right into the gummies. So those are hitting shelves as we speak.
So we have been really balancing, trying to fill orders on existing products with trying to create joy and excitement. The retailers are a little bit also, because right now, finding something new at retail is exciting. So we have actually done more new item launches during COVID than we had done before. So, so far so good.
Crystal: Wow. Yeah. So that's great. I know, I kind of mentioned that I've seen, the HARIBO stands that have all the different products. I've seen those more, I feel like at retailers. But I also was one of the people that switched to store pickup and online shopping. And you kind of alluded to this before and getting product in the right retailers and that kind of thing. Can you talk a little bit about navigating that and figuring out how to respond to changing consumer behavior?
Rick: Yeah, that's a great question. And it's one that keeps evolving because I'm starting to see people return. People like shopping, and I think you'll always have people that learn the behavior of buying online that they'll stay there. And that's fine. I mean, I know for ourselves, we never had used Instacart before, and now we have. And it's a very easy way to get our groceries, but that still means that I'm still out at retail and I'm still transacting money. So, we've adapted, now when you look at alternative channels or you look at convenience stores where you're doing your filling shop, and we're making sure the product is at arm's length in those stores where that transaction is happening. Some of our greatest retail experiences right now, or ones that are coming back, like Dave and Buster's was a great partner. Or you go look at Home Depot and Lowe's, in the checkout candy zones. And so those are the kinds of things you mentioned, Crystal, adapting. Those are the kinds of things that we've adapted.
The other thing that we've been working hard at is working with the retailers who have an online pickup business and how can we offer them products and make sure it's a larger size and it's part of mom and dad's stock-up trip. That part of our business is excelling.
And the other thing prior to COVID, we liked to sample our product and we had a great partnership with Six Flags Great America. Well, that has changed a lot, the way people use amusement parks. We're looking better in the future, but obviously the last few years, we took those samples and we went to different online retailers who were able to surprise and delight consumers in their shipment box with a sample on the inside. And it seemed very safe for mom and dad to find a sample that way. So those are the kinds of things that we did to adapt to changing consumer behavior. It's actually been really great test for us to be agile and to kind of pivot when you see the consumer doing something different.
Crystal: I think the samples is a really underused technique in the candy industry because I think about, I get make makeup shipments and they always have makeup samples in there. So I always feel like candy should be doing that. So that's great that you guys have done that. The biggest thing that I see from my perspective of the overall industry is if you're doing store pickup or grocery delivery, you're not seeing that impulse candy, like you kind of mentioned, and I know you guys do have the larger packs of gummies and that completes the bulk size, I guess you could say. But how are you working with retailers to make sure that consumers are aware of those products?
Rick: We've expanded our offerings on the larger sizes, and we've been focused on gaining new distribution. But obviously for a consumer who's meeting the brand for the first time, you kind of have to do both because would you go and spend $5 on something you hadn't tried yet? So that ends up rewarding a loyal consumer, someone who's familiar with the brand. So the one thing we did’nt do, Crystal, is completely pivot them and say, "Okay. Now our focus is on a larger size.” What we call the grocery size or the sharing size. We still put a focus on the entry code we need to kind of get people to the point where they're willing to have that much product in their house.
Crystal: And then you kind of mentioned these stores and making sure you guys were stocked there. I know that gum sales took a huge hit during the pandemic because of the store traffic decline, partly. Was that something that was an issue for you?
Rick: No. It actually became an opportunity. It became an opportunity for us. HARIBO gummi continues to grow to a double-digit and the retailer want to provide offerings that the consumer was interested in buying. So, if anything, the depression within the gum/mint business gave us an opportunity to gain display space, checkout zones, place and shelf space.
Crystal: Can you talk about like, what kinds of things from the pandemic surprised you or what were some of the lessons you learned? If you could talk to your 2019 self, what would you want to convey to them? Or what would you want them to know that you kind of learned throughout this experience?
Rick: I used the word agility earlier, but if I learned anything, it is really difficult to plan when you're in a situation that is just unchartered. So, what I learned and what I would tell myself because I am a planner -- you'd like to put a five-year plan together, step one, step two, step three -- you’ve got to learn that you can't plan that. And it's alright to try things. And then they have to pivot and do something different because the consumer was on this journey with us. And a lot of us were experiencing ourselves as consumers. You're gaining all this information. You're trying to keep your family safe. You're trying to get back to some sense of normalcy. Maybe this is the new normal and whatever it is, three or four months, you were changing your behavior. So as a company, we had to be cognizant of this and make sure that we weren't getting upset about the fact that we had to pivot and change together. It makes it very hard on an import business because we have such a long, long lead time. So it kind of puts stress on the whole supply chain when you're trying to pivot and do something different.
So the biggest lesson was you got to give your employees the freedom, your associates the freedom to come together and figure out a plan on how to change the way they work. We were a collaborative team environment and I'll give you an example. Our customer success team immediately had to take order entry and do it all remote, which they had never done before. But it was the team coming back to the management board saying, "Hey, I figured out a way we can make all this work with EDI, with the three different distribution centers." Giving them the freedom to come back and make a solution really made us very powerful. So as a leader, I'm one of those people that likes to help and I'm like, "Oh, I can figure it out." And then I'm like, "No, let them figure it out. We got this." So, I don't know if you read the news, but Fortune magazine just named HARIBO a top 25 company to work for. We actually got ranked 23 and that was all based on employee associate feedback. So that is the power of this company right now and the power of our growth is the team, our associates, and they have such a can-do attitude. So having faith in that group is probably one of the biggest learning site I got.
Crystal: That's awesome. So, I mean, can you imagine talking to your 2019 self and telling them, but we went so remote on just every aspect of our day-to-day jobs. Like, I'm sure you would have been freaked out.
Rick: Yeah. And it's in so much of what we do, and you probably talked to other people like us is collaborative, marketing, sales, finance in a room together. And then we have three remote distribution centers, and we import 4,000 containers. Those things you see in port of New Jersey or port of LA. So it's unthinkable to say, "Okay, we're going to do this all by talking into our computer." But I will tell you, I worry about associate [fatigue] and you probably are the same way. I'm like, "Oh, good. Another eight WebEx meetings. Can't wait for the end of my day."
So, I'm glad that we're all coming back together, at least on these collaboration days so that we can build the culture and celebrate together and safe.
Crystal: I wanted to ask about in the industry, we haven't had any shows really. I mean, we had the Sweets and Snacks Expo in May or in June this year, but that's been the main in-person event for the candy industry. I don't know if you can speak to that.
Rick: We have NACS coming up, which is convenient for us. That's the first week in October. And I just saw their safety protocols, so I think they have a very good plan. While they were different because of attendance and not everybody was able to be there, this was such a step in the right direction of us getting back together as one. So I was the first one at the door with my badge on, because I knew it was exactly what we needed in the industry.
Crystal: So you do feel like it's been a missing experience to not have. What's important to you about those shows?
Rick: What I like about this industry is we collaborate. If it's NCA and we collaborate at the category at the total confection level, or if it's with one of your retail partners around the table, designing a promotion or a seasonal activity or a new item. So we did the best we could with WebEx and with Zoom to collaborate, but now getting and being at the same table really helps people bring that collaboration.
Crystal: So you'd mentioned you guys are celebrating 100 years for HARIBO, right? So what do you see for the next hundred years? What are you excited about for the future? I know you have plan that you guys are working on and you're kind of introducing the US market. Can you talk a little bit about it?
Rick: Yeah. I can't even plan out five months later. Our 100-year anniversary for our corporation was last year. Next year is a hundred years for the Goldbear. So, one of our oldest in legacy products started as what was called the Dancing Bear. It was a gummi bear, and obviously, it's a really big milestone for our brand to have that 100-year legacy happened. And we have some big plans; stay tuned. Maybe we can talk again, and I can show you what's happening.
But what I see for the near future — let's not put years on it — is we have, I mentioned 1,000 items in our kitchen globally. We are very excited to continue to expose the U.S. consumer, the consumer in North America, to all the great things in our candy shop and to be part of their moments of joy.
So if it's a holiday celebration, if it's a Valentine's Day gift in a classroom, if it's an Easter egg hunt, and the beauty is you look at other markets. I'll give you an example, Germany, we have 60 percent household penetration buy. We're nowhere near that in the U.S. So we know that we have a lot of offerings that we can still offer to the consumer that they'll get to see in the U.S. So we have the ability to start making the product locally, and we have the ability to have different offerings in the brand DNA. It really allows us to even go further with that and to become part of the memory structure of the U.S. consumer. So a lot to happen in North America, a lot to happen here in the U.S., and I think the consumer continues to just embrace the uniqueness of our products.
Crystal: So can you actually speak a little bit about why you think the Goldbear is so endearing and why it has such a long-lasting relevance because not all candy is that old, as I'm sure you know. And trends change, tastes change and you guys are taking a brand that you said is going to be a hundred and still pushing it forward and still getting market penetration. Why has it been so embraced by consumers?
Rick: You know, I'll go back to our tagline, "Kids and grownups love it so. The happy world of HARIBO."
There's this spectrum where a little kids love gummi bears, playing with them, very playfully on the table. You can count them out. You can use them for your rituals and then consumers come back as adults. And I actually get such great feedback from our loyal consumers, adults who are like, “You know what? I just love gummi bears.” And, “It brings me back to the memory of my nanny who was from Germany or the au pair,” or, “Hey, I always traveled, and I saw them around the world and now see them at CVS.” So it's this act that the brand has so much appeal from kids and then up to adults. This all-family aspect of it is really, I think, in the core sweet spot or in the horrible pun on why they're so enthusiastic and so successful. Because what ends up happening is those kids, end up becoming moms and dads and they introduce it to their kids. So we always are very, very focused on the entire family.
We're focused on our high quality. If you look at our gummi, if you look at our history as a company, we've been extremely focused on gummies. So we have something we do well, and we have a formula that works, and we repeat that.
I don't know, Crystal, do you had a chance to see any of our TV advertisement, which is called kids' voices? It's a set in a board room setting. And all of a sudden, these adults talk in a kid's voice. We all love to be a kid again. Kids love to be kids and adults love to be a kid again. That advertisement really kind of plays to the DNA of the brand, a different perspective.
Crystal: I have seen those ads, they're really good. And then the factory is really showing your guys has commitment to the North American market. It sounds like, is that kind of one of the reasons for that in Wisconsin?
Rick: It gives us the ability to expand, but also we all love fresher products. And I mentioned that agility and flexibility and seasonal expansion that happen when your manufacturing is closest to where it supervise needs. It will give us the ability to take the road in the household penetration.