With more than 200 million condoms produced every year – which are then sold in over 50 markets all over the world –, CPR GmbH can rightly claim the title as Europe’s biggest condom producer. The company has roughly 140 employees, and its course is set by managing partner Michael Kesselring. EAN had the opportunity to speak with Kesselring and with Marco Gehlken, the head of marketing and distribution at CPR GmbH. Topics that came up during our interview include the company’s global activities, the changes in the condom market, the value of ‘Made in Germany’ as a seal of quality, and the advantages of having the entire production take place in-house.
CPR GmbH was started in 1987. Today, it is Europe’s biggest condom producer and its products are sold across the globe. Would you mind giving us a short summary of the history of CPR? Michael Kesselring: The fascination with the condom industry is basically part of my DNA. Even before the second World War, my great-uncle was a partner at a condom factory in Erfurt in the Eastern part of Germany. My father also worked in this industry for more than 20 years. And so, at some point in the mid-80s, while I was still studying to become a mechanical engineer, I decided to start a trading company for the distribution of condoms, rubber gloves, and baby soothers. In 1987, this trading company turned into CPR Produktions- und Vertriebs GmbH, with the added focus of building production machines for condoms. A lot has happened since then, and today, we are doing business in 50 markets. We produce more than 200 million condoms per year, and as of 2014, we’re officially Europe’s biggest condom producer. Being a mechanical engineer through and through, there’s one thing I am particularly proud of. All of our machines are designed in-house. Only recently, we achieved another milestone: Launching our brands in Germany. We are using the current structural changes in the German condom market to create a platform for our brands.
So the history of your family is closely connected to condom production. Does that create a feeling of obligation? Michael Kesselring: Safety is our business, as is innovation – maybe it’s something that simply runs in the family. We are taking our job very seriously, at any rate.
You have your headquarters in Sarstedt, near Hanover, but you also have other facilities. Where are those? Michael Kesselring: Our other branches include factories in Erfurt, Germany, and in Honduras. In both of these facilities, we check, seal, and package the condoms that are produced in Sarstedt. From our factory in Honduras, we also handle distribution of our products in the Central and South American markets.
Can you provide us with some figures about your production capacity? For instance, how many condoms does CPR GmbH produce annually? Michael Kesselring: By now, we are producing more than 200 million condoms every year, which makes us the biggest condom producer in Europe.
Why has CPR focused on international business so far? Michael Kesselring: Although being a brand “made in Germany”, we focussed on international business from the very beginning. However, as the current situation in the German market presented us with a great opportunity, we have now also launched our brands in Germany.
How many brands do you have at the moment, and how many different products are there? Marco Gehlken: Our range is wide and varied. The SICO brand alone offers 22 different condom variations. Our latest additions are the brands MEIN KONDOM and The Crazy Monkey Condoms. Moreover, we hold the licence for Fun Factory condoms and we also produce various white label condoms for trade members.
At CPR GmbH, research and development as well as production and shipping are all handled in-house. Which advantages does this approach offer? Michael Kesselring: Development, engineering, production, packaging, shipment (including online fulfilment) – with CPR, that’s all under one roof. It makes us faster, more flexible, and it allows us to control the quality of our products and our service 100%. Moreover, this strategy adds value to our company, it makes us independent – in short, we call all the shots.
How important is “Made in Germany“ as a seal of quality in the global condom market? Michael Kesselring: This seal of quality actually plays a very important role in our international business. When people hear “Made in Germany”, they think of top quality. And with comprehensive quality controls, we make sure that we live up to those standards.
What is your opinion on the current situation in the condom market? Would you say that ‘little innovation, but stable nonetheless’ hits the nail on the head? Marco Gehlken: I’d sum it up as more diverse than ever – and we are doing our part to adding even more variety. But at the same time, there’s predatory competition in this market, you need clear concepts and you have to be able to respond quickly to changes in the market. Fortunately, we know how to do that!
How has the market changed throughout the past years, and how have the channels of distribution changed? Marco Gehlken: The online market continues to gain importance – but we’re prepared for that. You also need a clear concept, and I am not just talking about the producers but also about their trade partners. For instance, we help our partners develop new and special concepts to better set themselves apart from the traditional market (i.e. drugstores, supermarkets, discounters).
What role does the traditional adult retail trade (brick and mortar as well as online) play for CPR Gmbh? Michael Kesselring: A very important role. In supermarkets/drugstores, we only sell private brands. We want to ensure price stability for our brands, and you can only do that if you work with specialised retailers and selected online shops.
The adult retail trade often complains that, as far as condoms and lubricants are concerned, there is more and more competition from drugstores and pharmacies – where these products are even sold at much lower prices in many instances. Is there a solution to this problem? Marco Gehlken: Yes, there are enough brands and concepts that you can only get in specialised stores or online – with these products, you can still generate decent margins. It is true what you say, though: Some discounters are selling quality brands at bottom prices – a very short-sighted approach.
“Some discounters are selling quality brands at bottom prices – a very short-sighted approach.“
Have your customers changed over the course of the years? Who typically buys your products? Marco Gehlken: The lion share of our sales is to 20 to 40-year olds, but of course, there are also younger buyers and much older buyers. We have the right product and the right brand for all of them. However, it’s not so much a question of age but rather a question of mind set.
Where do these consumers buy your condoms? Are sales also shifting toward the online segment? Marco Gehlken: Absolutely. E-commerce shops simply offer more variety. There is still lots of potential in the brick and mortar trade, however, it is necessary to cater to the digital world as well. The situation is the same as in any other market, really.
How does CPR GmbH respond to these developments? Marco Gehlken: We have been developing concepts for mobile devices to give the buyers of our brands an incentive to visit brick and mortar stores. We are already in talks with potential partners, and we aim to introduce it to the market shortly.
Which factors influence the consumers’ choice when they are buying condoms? Why do they pick a certain brand? Is it the price? The quality? Sustainability? Marco Gehlken: All of those things play a role. The key driver, however, is still safety (protection from infection, contraception). Other things that matter are obviously: fit, variety/innovation, and brand/lifestyle – the price is secondary, I think. Sure, some consumers are looking for the lowest price, but many look for quality condoms that fit, or innovative condoms that match their sexual attitude. We have something for all tastes.
Traditionally, condoms are first and foremost about ‘safer sex’, a protection against STDs and AIDS. Is that still the first thing on people’s minds when the buy condoms? Michael Kesselring: Yes, it still is. Fortunately, people are still learning about these things, which is very important.
What is your strategy to prepare CPR GmbH for upcoming challenges? Michael Kesselring: We have poured lots of resources into the online, distribution, and marketing departments. We have great people with experience and innovative minds in our company – and we are ready and able to invest in growth and to establish and strengthen successful partnerships.