FDBusiness.com

Haribo has spotted an untapped opportunity for sugar confectionery in travel retail and has set up a new division dedicated to the channel to fill the void.

The company has been in the channel for some time, but sales were previously managed by around 35 subsidiaries in its operating countries.

Manuel Coronilla, head of the new division, told ConfectioneryNews.com: “We are centralizing this part of the business,”

“Last year we saw the potential. We saw that we can we can develop in this sales channel and saw a big increase without making big efforts.”

Few players

Coronilla, who has worked at Haribo for 11 years, said that between 80-90% of confectionery in travel retail was chocolate, such as Mondelez’s Toblerone and Yıldız Holding’s Godiva chocolate.

He said that sugar confectionery only made up a maximum of 20% of the category, with Perfetti Van Melle’s Chupa Chups the only other major recognizable brand.

“There we see the potential. In sugar confectionery you don’t have that many.”

Travel retail: A whole new world
Coronilla said that in travel retail you need to understand “the traveller”.

“It’s a completely different world. They buy for different reasons”.

Some will buy a treat on impulse to eat while travelling; others will buy confectionery to share with families, while some buy products as gifts.

Unlike traditional retail, the duty free channel is much more about the brand, the customer shopping experience and creating a sense of luxury akin to the glamorous spirits and cosmetics found at airports, said Coronilla.

Take taste preferences on holiday

He added that confectioners must also cater to local preferences. For example, many British people take vacation in the South of  Spain.

“You should offer them something they know,” said the division head.

Although it is not big in Haribo’s home market, Germany, Starmix is the Haribo’s bestselling UK product and would be a safe bet, he said.

“Asian people spend more than the average European consumer,” he continued, making it possible to offer products at higher prices in Asian airports.

New products and growing markets

Haribo’s travel retail division is currently very fragmented. The firm exports to 100 countries, but operates in around 40-50 countries in travel retail.

The candy maker is currently doing business in the channel with German firm Heinemann, Swiss Group Dufry and Asia-Pacific firm DFS Galleria among others.

“Asia is a growing market and definitely the Americas,” said Coronilla.