US candy lovers will soon be able to enjoy Haribo’s iconic gummi bears – and feel patriotic as they do.
Haribo, the German candymaker famous for its bow tie-wearing gold bear mascot, said on Thursday that it has acquired property in southeastern Wisconsin where it intends to build its first North American facility. Confectionery will be made there starting in 2020.
Citing its rapid growth in the US market, the company says it hopes its expansion in North America will help it make headway against competitors. Haribo, which made its first leap across the Atlantic in 1982 and operates from offices in Rosemont, Ill., sold $69.8 million worth of product in the United States in 2016, according to sales data from Statista. It also saw a double-digit increase in sales in each of the five years prior to 2012, according to the Baltimore Sun.
"Haribo of America is the fastest-growing candymaker in the US," Hans Guido Riegel, Haribo's managing partner said in an emailed statement to Reuters on Thursday. "That is why the step to start with local production from 2020 is important to us."
The new 500,000-square-foot factory in Kenosha County – 56 miles north of Chicago – is one of the largest in the confectionery industry, according to Wes Saber, Haribo of America’s chief financial officer. The plant will create 400 jobs that, according to Wisconsin Gov. Scott Walker, pay above market salary and “tend to offer a full benefit package.”
The choice of Wisconsin is strategic, the family-run business said. With 7,000 employees and 16 factories in 10 countries, the firm had been looking for a US manufacturing site for a few years and had examined many different sites, said Rick LaBerge, chief operating officer of Haribo of America.
The Midwest state’s tradition of nurturing a large manufacturing economy landed it Haribo’s new $242 million plant, Governor Walker said. The state offers considerable tax incentives to manufacturing businesses, which, since 2016, can receive a 7.5 percent tax credit. The village of Pleasant Prairie, where the site will be built, already hosts a Jelly Belly Candy’s warehouse, according to the Milwaukee Journal Sentinel.
“Haribo is a great fit with the many other iconic companies that already call Wisconsin home,” Walker said in a statement on Thursday. “The state’s business-friendly climate and strong fiscal management, along with our dedicated workforce and reliable infrastructure, are among the many reasons Haribo decided Wisconsin was the right choice for this facility.”
The announcement came as the unemployment rate in Wisconsin dropped to 3.7 percent in February, the lowest since 2000. The state had 468,700 people employed in the manufacturing industry last month.
The move to produce in the United States comes at a moment of some tension between Germany and America over trade.
As Germany's trade surplus reached a record $270.05 billion last year, Trump’s top trade adviser, in an interview with the Financial Times in February, accused Berlin of exploiting a “grossly undervalued” euro to gain advantage over the US and other European countries. The US is Germany’s largest export destination, buying German goods and services worth $114 billion with just $62 billion in return last year.
German Chancellor Angela Merkel denied the charge and sought to discuss the trade conflicts during her trip to the White House last week, as The Christian Science Monitor reported.
"The United States of America is a key trading partner for Germany and for the entire European Union," Chancellor Merkel said before the trip, according to Reuters. "Trade is advantageous for both sides.”
The decision to invest in production in the US also highlights Haribo’s desire to further capture the growing gummi market in America while it faces some challenges in Britain. In Britain, amid concerns over rising obesity numbers, the candymaker saw a reduction in sales last year. Across the ocean, however, American consumers continue to consume gummis at increasing rates, with estimated sales of $1.1 billion in 2016, according to the National Confectioners Association.
“Gummis have gained in popularity, and we were early entrant in the US market,” Mr. LaBerge told the Retail Merchandiser. “We continue to grow as US consumers realize their love for the gummi category, and our products have a different look and feel, which helps to make us unique in the marketplace.”
This report includes material from Reuters.