those German sweeties

Tuesday 20 July, 2010

I attended this reception for German sweets & snacks manufacturers who were in town for the Institute of Food Technologists show @ McCormick Place.  I highlight a few of these firms simply to bring out a few of the differences between German & American business.  1st of all, the exhibiting German firms are all family-owned companies upon which the German economy is based, the so-called Mittelstand, or mid-sized firms.  There are advantages & disadvantages of working with these kinds of firms.  They are private, which means they don’t have to worry about keeping shareholders/investors happy, but that also usually means that they abhor venture capital, so they rarely exhibit fast growth.  Branding each of these products in America could be time-consuming & expensive, so I’d be surprised it many of these firms will go it alone that way.  I was told that they are simply here to explore different strategies, so apparently they are not locked into approaching the market in any 1 particular channel.  Each would do well to ditch the .de domain name in favor of .com

In the German tradition, Päx Food has created a new food category by creating its own drying process different from freeze-drying by working together with the world-famous Frauenhofer Institute to create foods that are dried, but much less so than other dried fruits & vegetables.  It’s commendable that the Germans continue to innovate even in areas as mundane & supposedly already explored as this.

Katjes makes Gummi-Bear type candies, which is exactly the problem.  They use Heidi Klum in advertising @ home, which I’d love to see here, but I’d be surprised if that alone would make a market.  Another German company, Haribo, has built a good business with its Gummi-Bears.  Competing with this entrenched competitor will not be easy.

Many different kinds of bread are staples in the German diet, so there is much to appreciate from the Mack Bakery.  Their task will be to develop the same level of deeply-embedded cultural appreciation for bread in America as they have in Germany, which is no small task.  Bread doesn’t travel well, so I wonder if they’re considering making a direct investment.

The Germans started some of the 1st natural & organic food bandwagons, so it’s not surprising that Maintal wants to bring organic preserves & fruit spreads to the U.S.  Although they apparently already ship to other far-flung markets in the world, I would think transportation would be an issue for products with a limited shelf-life.

Kölln is Germany’s largest local cereal producer, but still behind worldwide leaders General Mills, Kellogg’s, & Post. It’s not realistic to supplant the big guys, but they might be able to build a nice niche business based on oats.

Baur Chocolate might have the most difficult path to establishment in American markets.  I didn’t see anything that differentiated them from other chocolate manufacturers.  They even need to localize their website beyond German.

The German American Chamber of Commerce  has said they may make available a short powerpoint presentation given @ the reception in about 1 week.


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