French Open champion Maria Sharapova is turning her sweet tooth into a profitable business.
She spent $500,000 to set up Sugarpova, her own candy brand, and the 25-year-old from Russia may more than double her money in the first year alone. She introduced it today in Australia, where she’ll be seeded second when the tennis season’s first major tournament starts in three days.
The gummy candy was first marketed in the U.S. in August, reaching 250,000 bags in the first three months, according to Max Eisenbud, Sharapova’s agent at IMG Tennis. He’s forecasting sales of 1 million bags in a year as distribution starts in the U.K., Australia, Japan, Canada, Russia, India and China. Sharapova, who gets as much as $1.10 per bag, said she’s surprised by the success.
“We don’t really have a big budget at all for marketing and advertisement,” the four-time Grand Slam tournament winner said in an interview. “So it’s pretty incredible that the awareness that it has so far is where it is,” said Sharapova, who faces fellow Russian Olga Puchkova in her opening round in Melbourne.
Eisenbud said he spends about 60 percent of his time on Sugarpova. The sales, he said, come from “Maria’s star power.”
“Every week, everywhere she goes, people are talking to her about it,” the agent said. “It’s also the power of social media, the power of her almost 9 million fans on Facebook.”
While researching the candy market, Eisenbud and Sharapova came to the conclusion that “there is no real brand recognition with gummies,” said Eisenbud, the candy brand’s chief executive officer.
$5.99 a Bag
The pair focused on producing a premium product -- which is made in Spain -- and colorful packaging. A bag of Sugarpova sells for as much as $5.99, or about six times the price of a bag of chewy sweets made by Haribo GmbH, the Bonn, Germany-based market leader.
“She’s got an interesting niche positioning for herself, because she has no competitors right now,” Marcia Mogelonsky, director of insight at market researcher Mintel Food & Drink, said in an interview. “This is a part of the confectionery industry that doesn’t have a premium segment.”
Still, Mogelonsky said, the product may struggle as consumers become more conservative with their spending and the original excitement of the brand wears off. Haribo, a closely held company founded in 1920, produces 100 million gummy bears a day. A Haribo spokesman was unavailable for comment.
“They might buy it once because it’s a novelty item and they want to keep the label, they might buy it once to try it, but it’s still a lot of money for most people,” Mogelonsky said.
Sharapova shot to global fame and became the world’s best-paid female athlete when she won Wimbledon in 2004 at age 17. A U.S. Open title followed in 2006 and an Australian Open in 2008, before an injury sidelined her for nine months.
Last year, she became the 10th woman to capture all four major tennis championships by winning the French Open. Her annual earnings from prize money and endorsements with the likes of Nike Inc., Samsung Electronics Co. and Tiffany & Co. are estimated at close to $28 million, according to Forbes.
$28 Billion Market
“She’s attractive, and she’s well-spoken,” said Mogelonsky, who estimated the market for gummy candy in the U.S., Asia and Western Europe to be $28 billion last year. “Those two things right away help her. Sugarpova is a cute name. Even those who aren’t focused on tennis might find the name intriguing, the packaging intriguing, and the flavors.”
The problem Sugarpova faces is sustaining interest.
“If the candy is good, and if it catches and if she can keep this going more than a year, it should be good.” Mogelonsky said.
Although Sharapova has co-designed for Nike, Cole Haan and watch brand Tag Heuer, her line of gummies with names such as Smitten Sour, Quirky and Sporty is her first foray into business all by herself.
Sharapova, who owns all of Sugarpova, said she “stressed for about a week before it” when the line was introduced in New York in August, just before the U.S. Open.
“I remember the day before, I was like, ‘Oh, maybe this was not a good idea, maybe we should have just started just small,” she said.
Jeff Rubin, creator of the FAO Schweetz candy departments inside FAO Schwarz toy stores, co-founder of Dylan’s Candy Bar and a Sugarpova consultant, said the tennis player is “very, very involved” in the brand. Rubin’s deal allows him to earn a percentage of sales when profits hit certain thresholds.
“Her commitment is best exemplified by the fact that less than 24 hours after winning the French Open, she was doing final taste tests at the factory in Europe,” Rubin, who came up with the name Sugarpova, said in an interview.
“I really wanted to do something on my own,” Sharapova said, adding she’s learned a lot promoting other companies’ products and designing over the years.
“I have a big sweet tooth,” Sharapova said. She’d always ask her mother for a candy bar or a lollipop after a good practice when she a child.
Eventually, the Sugarpova brand may expand into other products after Sharapova retires from tennis.
“First and foremost, we’re still getting our feet on the ground in terms of the candy but eventually, I would definitely see it in fashion, in cosmetics, in different passions of mine,” Sharapova said.