Saturday, July 08, 2006

Italian Confectioner Perfectti gobbles up Spain's "Chupa Chups"

The ANNOTICO Report

Augusto Perfetti, chairman of the privately owned Italian confectioner Perfetti van Melle, and Italys fourth-largest maker of sweets.

paid 400 million (#275 million) to acquire "Chupa Chups" a product as well known in Spain as aniseed balls and humbugs once were in Britain.

Seqor Bernat started the firm in 1958 after realising when children ate sweets they got themselves in a sticky mess.

The solution was easy: put the sweet on top of a stick. Called "Chupa Chups", (translation to "Sucky Sucks") become

the worlds biggest lollipop manufacturer.

In attempting to expand the "Chupa Chups" to the adult market , especially to those who are attempting to quit smoking

after a heart attack and started chain-sucking Chupa Chups. It started with the slogan Smoke Chupa Chups.

He cleverly linked it to celebrities such as Madonna, Esther Caqadas, the Spanish model, Javier Bardem, the actor,

and Johann Cruyff, the former Barcelona Football Club manager.

SPANISH LOLLIPOPS PROVE A SWEET DEAL FOR ITALIANS

The Times

By Graham Keeley in Barcelona

July 08, 2006

LIKE all the best business ideas, it was as simple as could be. But Enric Bernats brainwave, Chupa Chups, went on to become the worlds biggest lollipop manufacturer and a Spanish icon.

With its simple flower motif wrapping designed by Salvador Dalm, the lollipop became an international brand beyond Spain.

To spread the products appeal, from childrens sweet to adult fashion accessory, Bernat cleverly linked it to celebrities such as Madonna, Esther Caqadas, the Spanish model, Javier Bardem, the actor, and Johann Cruyff, the former Barcelona Football Club manager.

In a cheeky publicity stunt, Chupa Chups even sent the first lollipop into space with a Russian astronaut during the MIR mission in 1995.

But the company has now been eaten up by the privately owned Italian confectioner Perfetti van Melle for 400 million (#275 million). It marks the end of an era for a product as well known in Spain as aniseed balls and humbugs once were in Britain.

The family-owned company, based in Barcelona, hit financial problems after aggressive expansion into 170 countries in the 1990s. Sales fell from 450 million in 2000 to 264 million in 2004, with profit dipping to 11 million.

Seqor Bernat, who died last year, had hoped to transform Chupa Chups into the Coca-Cola of lollipops, but did not want to make the company public and could not compete with other global sweet manufacturers.

Seqor Bernat started the firm in 1958 after realising when children ate sweets they got themselves in a sticky mess.The solution was easy: put the sweet on top of a stick.

Spain was just opening up to foreign investment. Seqor Bernat promoted the company with a catchy childish song on the radio, when many homes did not have a television.

The company diversified, producing 40 flavours of Chupa Chups and other sweets such as Smints mini-mints.

By 1996, as the product became established internationally, 20 million Chupa Chups a day were being consumed worldwide. But in Spain, where the birth rate had begun falling in the 1980s, fewer children were sucking Chupa Chups.

So in a clever change of tack the company aimed for adults. Johann Cruyff, then the Barcelona manager, quit smoking after a heart attack and started chain-sucking Chupa Chups. A health campaign started in Australia with the slogan Smoke Chupa Chups.

Seqor Bernat used the fruits of his success to buy Casa Batlls, a house in Barcelona designed by Antoni Gaudi. But he lost money when he tried to acquire an investment bank.

Augusto Perfetti, chairman of the Italian owners of Chupa Chups, said that the purchase would significantly reinforce its position. The company is Italys fourth-largest maker of sweets.

STICK SOLVED A STICKY PROBLEM

· Chupa Chups translates as Sucky Sucks

· Seqor Bernat said: I saw sweets didnt suit their main consumers, children. They got their hands sticky and ran into trouble with their parents. So I stuck a sweet on a stick

· The secret of Bernats success was that the lolly did not melt in the Spanish heat. He exploited the low wage costs under General Francos dictatorship when unions were weak

http://business.timesonline.co.uk/

article/0,,13130-2260676,00.html

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