Caring Confectionery #5: Market Insights With Vegan Gummy Brand Katjes
On the Japanese market for over two decades, Katjes convinced its local partners to adopt their vegan line-up.
Hello, Market Shakers!
To conclude our Caring Confectionery cycle, we have Yvonne Hauf, Director Business Unit International, and Marc Leonhardt, Business Development Manager at Katjes, a licorice and fruit gum confectionery company based in Germany.
The third-largest producer in the German sugar market behind Haribo and Storck, Katjes has been present on the Japanese market for many years. Today still, Katjes is one of the only vegan brands of fruit gummies available in Japan. Therefore, we were very excited to get the opportunity to get some insights!
Before we start, here’s a little more about Katjes.
Katjes is a family-owned sweets business that goes back to 1910. Since its start with delicious and natural licorice treats, Katjes has grown to become one of Germany’s most popular candy brands. The company has always cared to provide better-for-you treats, and they’re using natural flavor and coloring since 1988. Over the years, Katjes transitioned to a brand that does not use animal gelatin. Twenty years ago, the company landed in Japan and has had a long and fruitful experience on the Japanese market since then.
Katjes stands as the plant-based confectionery brand on the market, building a close relationship with their consumers through provocative advertising.
Led by the family’s third generation, Katjes has taken a strong stand as a plant-based confectionery company on the market, both in Germany and abroad. Over the years, the licorice and gummy manufacturer transitioned to become exclusively plant-based. The transition came with a new younger, edgier look and feel of the brand, fitting closely with their target market.
In the research with our consumers, the Katjes brand was associated with attributes such as “vegetarian,” “stylish,” “trendsetter,” and “women.” Therefore, we focus on topics that concern young, trendy, and dynamic women with an interest in better for you snacking.
Two years ago, Katjes also debuted in the vegan chocolate category with Chocjes, a chocolate bar made from oat milk instead of cow’s milk. The first two new products — Original and Hazelnut, got a warm welcome from their consumers.
We were curious to see how our consumers would react and think of Katjes making vegan chocolate. But it was a very natural move because everybody associated Katjes with being plant-based.
With the expansion of our product line through the launch of Chocjes, we are strengthening our commitment to ‘create great things’. Katjes is an expert at vegetarian fruit jelly sweets. But with Chocjes, we are also catering to a growing consumer audience that is seeking out alternatives to cow’s milk.
To inaugurate the launch of Chocjes, the company created a provocative advertising campaign that buzzed in Europe and hit the mark with consumers. The animated video commercial was hand-drawn by famous cartoonist Gerald Scarfe and showed cows as being milk machines.
Our spot showed that cows are not milk machines, not even for chocolate, and that, luckily, there are new alternatives out there. For example, you can use oat milk, and that’s what Chocjes is doing.
Going big and bold is Katjes’s motto for advertising the brand, its values, and its products. The company’s strong engagement for sustainability and developing environment-friendly products is critical to be as close to Katjes’s consumers as possible.
Whenever we advertise Katjes and our products, we go for controversial topics our consumers care deeply about. An example would be our billboard campaign showing a breastfeeding woman because breastfeeding in public is still contentious in our society, or a massive billboard of two kissing girls holding our rainbow gummy. In addition, we sponsored the Berlin Pride Parade two years ago. We are, and we want to be perceived as a brand that connects with our consumers.
Commitment and German-made quality carried Katjes success in Japan.
The company’s core market is historically close to Germany, where Katjes is a trendy brand. But the fruity gummy manufacturer naturally expanded first to the Western and Eastern parts of Europe before taking on Northern countries.
We are present outside of Europe, too. We have distributors and distribution in the Middle East, like Saudi Arabia. We just launched in the United States and are present in Asia, with Japan, as you know. Japan’s strong and established gummy category made the market very attractive for Katjes.
The company landed in Japan over two decades ago, focusing on urban areas with specialty stores and imported product stores. When they entered the market, the company’s portfolio had mono fruity flavors perfectly aligned with products on the Japanese market. Quality-sensitive Japanese consumers also trusted the made in Germany label.
Our blackcurrant flavor was our number one best-selling product in Japan. The Japanese consumers also like our products for their quality — this aspect is essential. On top of it, our playful packaging also very much explained why consumers perceive us positively.
Katjes’ natural food flavors and coloring are also an essential part of the brand’s success with Japanese consumers. The look and feel of the brand also work well in Japan. The company sells its products on the Japanese market without localization, beyond the required label translation. A fruitful choice, as the brand’s fun and colorful packaging, with comic-style illustrations, really resonates with Japanese consumers’ love for kawaii culture.
Perhaps our packaging aesthetics might seem a little bit childish because we show animal figures. But it appears that Japanese consumers appreciate cute faces. Maybe our illustrations resemble manga, making Katjes products stand out on shelves and catch consumers’ attention.
Another key to Katjes’ long success in Japan is the company’s commitment to building long-lasting business relationships with distributors. Their loyalty value is a perfect match for Japanese business culture, where hard-won over time trust is key to enter and stay on the market.
When exporting in a market that has not caught up yet with plant-based nutrition, the challenge is to educate consumers.
When Katjes transitioned to an entirely plant-based gummy company, they couldn’t keep all their products. The mono-flavored fruity ones that did so well on the Japanese market at the beginning had to go. A risk Katjes was committed to making.
We had to take out some products from our portfolio, such as the blackcurrant gummies referred to earlier. Our new innovation concepts were built around uniquely shaped gummies, each article telling a special story. The simple fruit shapes did not fit that strategy anymore. Therefore, the first challenge was to unlist products that were very established and well-received in Japan.
Katjes then reintroduced new unique flavors and shapes, but getting consumers’ acceptance took some time. Today, the German company is one of the only plant-based confectionery brands available in Japan. We spotted their products at international and specialized stores and read some social noise on Japanese vegan blogs.
Aside from consumers embracing a vegan or vegetarian lifestyle, few knew that gummy is made from animal ingredients. Most mainstream consumers we reached out to seemed clueless about plant-based gummies. Instead, their initial reaction was surprise and curiosity. So, for plant-based confectionery companies in general, educating consumers is key to their success in a new market.
When you go outside of your home market, the obvious challenge is educating people that the original gummy contains animal gelatin and on what animal gelatin is. You have to explain that it is derived from animal by-products, pork or beef skin and bones.
In Germany, it has taken a significant time to raise awareness. Therefore, we always incorporate in our communication that our products are made without animal gelatin.
In Germany, consumers have a different understanding of the brand. Society cares and loves animals beyond pets, so many consumers purchase Katjes for ethical reasons. In Asia, however, health is the main driver.
We have been on the market for many years, and the perception in Europe is very different. People buy Katjes because we don’t have animal ingredients, and there’s a rising demand for plant-based products.
In Asia, we believe this aspect isn’t essential yet. It’s more about having a flashy, tasty product, a healthy snack with good quality ingredients. But animal welfare and sustainability, the core visions of our company, do not matter as much.
Japanese consumers are unaware of what Katjes stands for, partly because they’re not as sensitive to ethical issues and because Katjes has not done much advertisement yet.
Katjes’ business partners in Japan were skeptical about the recipe change but supported their transition.
In general, distributors and retailers are always open to hearing new concepts and innovative products. But going forward with plant-based recipes only, Katjes’ gummies went from a hard to a softer texture.
In the beginning, our distributors and retailers were slightly skeptical about our new line-up. It was a core change to our gummies’ texture. But today, they are opening up, and we see an interest in new plant-based categories. For example, they inquired about our vegan chocolate Chocjes, so there’s already a demand, but we’re still in the development phase. At the moment, we’re checking regulations, but it’s usually not too challenging for plant-based products.
The Japanese market has not yet embraced the plant-based chocolate trend like in Europe or North America. As a result, the options in retail and e-commerce are limited. We did find a few brands — listed in our Caring Confectionery Shelf Sweep, but they’re not frequently advertised as plant-based products and often available in allergy-free products store aisles.
In Germany, the vegan market chocolate burgeoned only a few years ago, with almost no players at the time. In Japan, where there’s a powerful milk industry, players have large budgets to protect their business.
The Japanese dairy industry is undoubtedly strong and ready for a fight. In our Beyond Milk cycle, we briefly explained that the Japan Dairy Industry Association (JDIA) diminishes the consequences and reality of lactose intolerance and milk allergies. The industry also strongly supports milk being served at school lunches.
At Katjes, everyone believes the plant-based trend won’t be ending any time soon. The future of food is ‘green.’
In Japan, Katjes is listening and analyzing the market feedback to strategize the year to come and what to do next. That’s always how the company has worked across markets — a proven formula. With the plant-based trend here to stay, consumers’ awareness can only grow.
The plant-based movement isn’t a quick trend. The plant-based movement will stay. Plant-based products will get more popular in markets where the awareness is not as big yet. We all know that our planet won’t be there forever if we don’t do something about it. Companies, not only in Europe but elsewhere too, see that we all are responsible. The core belief in sustainability drives Katjes.
Katjes is one of the first companies in the confectionery segment to become 100% climate-neutral. The company works hard to compensate wherever they can’t reduce or avoid carbon emissions, and Katjes can now claim that its products are carbon neutral.
There is a food revolution taking place right now, and Katjes owners saw the shift coming years ago. This is why they founded Katjesgreenfood. One of the pillars inside our group is investing in startups that come up with innovative concepts and food alternatives, plant-based and better for you alternatives outside of the confectionery segment. So it’s safe to say the future of food is plant-based.
That’s all, folks!
Our Caring Confectionery cycle has reached its conclusion. Market Shake will stay on course with the plant-based revolution. Starting next week, we will dive into the latest trends and product development for the ice cream, yogurt, and cheese categories.
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