How much would it cost to have Britney Spears promote your business this Christmas? $250,000? $25 million?
Would it be worth more to you than a 25-cent lollipop?
Pepsi may have paid the 20-year-old diva untold millions to endorse its cola (even though fans say that her real drink of choice is Coca-Cola). But when Chupa Chups, the world's largest maker of lollipops, decided to go after a new generation of customers, TV footage of Britney licking its lollipop cost the Spanish firm next to nothing. It's just one small piece of an ongoing campaign that the 45-year-old company has embraced in an attempt to establish Chupa Chups as the world's brand for lollipops. The company is using smart, creative business techniques that resemble the methods of such established players as Nike, Starbucks, and Swatch. Chupa Chups has taken its fun and flavorful treat to the world market -- and now hopes to snag fans beyond just kids -- to make suckers of us all. Its program: a delicious combination of savvy product placement, fresh marketing ideas, new flavors, and -- coming soon -- its own line of retail boutiques.
Nike, for example, may have written the book on celebrity advertising, with photos of star athletes wearing swoosh-showing shoes visible on the covers of sports magazines. But Chupa Chups does it better -- and cheaper. Deploying guerrilla maneuvers to win "subliminal" endorsements at film premieres, music awards, and fashion shows, the family-owned Catalan confectioner makes sure that pop princesses, movie stars, and sports icons always have a Chupa Chups to suck once the cameras start rolling.
The list of nonendorser endorsers is as extensive as it is impressive: Madonna, Giorgio Armani, Brandy, Elton John, Sheryl Crow, Magic Johnson, Jerry Seinfeld, Gerard Depardieu -- each one has been recorded as a Chupa Chups "celebrity sucker."
It's 100% unofficial, under-the-radar opportunism, admits licensing director Marta Bernat, a daughter of Chupa Chups founder Enric Bernat, at the company's headquarters in Barcelona, Spain. "Of course, we can't use the photographs in our own advertising," she says. "We simply invite celebrities to try our products, and if the media want to take their photograph, we're not going to stop them."
On Beyond Children
Chupa Chups may be a small-sized pop, but the company intends to make a big global bang. It already makes 4 billion lollipops a year, selling 40 flavors in 170 countries. But compared to such chocolate giants as Hershey Foods Corp., Mars Inc., and Nestlé, Chupa Chups, with its quirky Salvador Dali - inspired logo, is just a little lolly in the global candy jar. And while Chupa Chups are being devoured by sugar-hungry kids in emerging markets, big markets such as the United States, Europe, Japan, and Australia are running out of children.
So Chupa Chups is carving out a new market among teenagers and young adults for its candy on a clear plastic stick. The company created an international task force, dubbed "4C," for Chupa Chups' Corporate Communications, to raise brand awareness among these fashion-conscious, media-savvy consumers. But rather than shell out big money for big-name endorsers, Chupa Chups has adopted a tactic that worked first on the soccer field.
When he learned that Johan Cruyff, then coach of Barcelona's soccer team, was trying to quit smoking, an eagle-eyed 4C sports fan generously sent him a complimentary box of Chupa Chups. Chupa's pitch fit the soccer pitch: For the rest of the season, Cruyff was rarely seen on the sideline without a lollipop in his mouth. 4C executives watched Chupa Chups sales in soccer-crazy Catalonia double that year.
The company scored similar one-off coups with the World Cup - winning French team and Russian cosmonauts on the MIR Space station (first lollipop in outer space!) before launching itself into the orbit of premieres and awards ceremonies. September? It must be time for the Venice Film Festival. February? It's the Grammys. October? The Milan fashion show, of course. When the A-list stars come out, scantily clad "Chupa Chicks," often wearing little more than a lollipop-studded bra, are there to meet them.
The campaign is perfect for Chupa Chups, says Xavier Bernat, its chairman. "If you eat a piece of chewing gum, you hide it in your mouth, but there's no hiding a lollipop," he says. And it works, he reckons, because young consumers are smart enough to know when their heroes are acting naturally -- and when they're pushing a product because of a sponsorship deal.
The Sweet Taste of Success
The strategy is proving to be a sweet success -- at least in Europe, where more than 50% of Chupa Chups consumers are now over the age of 11, as compared to 20% just a decade ago.
Chupa Chups has been sticking out its brightly colored tongue at convention since 1957, when Enric Bernat, a third-generation candy maker, took over an ailing Spanish confectioner and melted down its 200 products to focus on producing a single line of quality lollipops.
Within five years, Chupa Chups sales reps were servicing 300,000 outlets around Spain with a fleet of Seat-600 minicars and instructing shopkeepers to place the company's porcupine-like displays as close to the cash register as possible -- a break from the traditional policy of keeping candy in glass jars behind counters, far from little fingers.
During the 1990s, Chupa Chups threw itself into global expansion. Now 90% of its sales are outside Spain. When rivals steered clear of manufacturing in Russia, Chupa Chups jumped in headfirst, a gamble that has paid off handsomely (despite a machinery heist on the road to St. Petersburg). Russians now consume around 1 billion Chupa Chups lollipops a year.
Like a hyperactive child who has eaten too much candy, Chupa Chups continues to innovate at a furious pace. Initial flavor blends such as strawberry and cream, chocolate and banana, and chocolate and vanilla were simply a taste of things to come. In some cases, when Chupa Chups enters a new market, a new flavor enters its canon: jasmine and green tea in China, mango and chili pepper in Mexico, orange with extra vitamin C for Russia. The Middle East territories warranted a date-flavored lollipop. In more-developed markets, flavors for adult palates include margarita and piña colada, cappuccino and mocha.
But new taste is only one way that Chupa Chups is innovating. There are also new delivery mechanisms that mark this lollipop as extraordinary: It's being packaged in toys and makeup kits and inside pretend paint cans. The Chupa Chups name is being licensed to makers of clothing, eyewear, shoes, motorcycle helmets, perfume, and toothpaste. The company also now owns two more brands: Smint mini-mints, aimed at adults, and Crazy Planet, novelty candy toys that include a digital watch with a secret gum-filled compartment.
Xavier Bernat, who took the reins from his father in 1998, is eager to make amends for last year's disappointing 2.4% fall in sales -- the first decline in more than a decade, due in part to a Pokémon merchandising deal that turned sour. Chupa Chups also quit an awkward marketing agreement in the United States with Mars Inc., whose more conservative family didn't sit well with a company that once had internal plans to advertise its core product as "oral pleasure."
But those stumbles have done nothing to discourage Chupa Chups from its innovative course. Bernat has a plan to put a sweet taste back in the company's mouth: a network of 5,000 Swatchlike "shops in shops" -- dedicated retail spaces within department stores and kiosks at airports, malls, and theme parks. It's a move that will increase sales turnover, he hopes, by 15% to 20% within the next three years. "We've worked hard to create strong brand awareness," he says. "It's time to convert that to sales."
Sidebar: The Brains in Spain
Chupa Chups is one of several smart companies in Spain enjoying success around the globe. Clothes retailer Zara has hit on a successful formula by combining high fashion with value pricing. The Mango clothes retailer, launched by a Barcelona street trader, has replicated that feat with 575 stores in 68 countries. Catalonia's Freixenet Cava took the lifestyle associated with champagne and grafted it onto sparkling wine, and now has sales approaching 100 million bottles a year. What do these Spanish entrepreneurs have in common?
A good number of these enterprises are driven by compact family structures and paternalistic management, where the major decisions remain in the hands of the owner. They tend to place great emphasis on distribution, with resources devoted to opening outlets quickly, rather than to advertising. They've worked for many years to refine their businesses before launching internationally -- but their ambitions were always global. "They all started out with high goals, defining their market as the world," says Diego Torres, marketing professor at ESADE business school in Barcelona.