Kathi is an outstanding example of a successful new start of a medium sized company after the German reunification. Kathi originated in 1949, the fourth year after the war which was still affected with insufficient food supply. Kathi, as a rare East German innovator, launched baking mixtures 19 years ahead of Kraft Foods and 20 years ahead of Dr. Oetker. However bitter years followed for the founders after the company was confiscated by the communistic regime.
But after the Berlin wall crumbled, Kathi achieved a successful new start – a positive exception to many other East German brands and companies. Reasons for this positive performance were superior product quality and high brand awareness. However, a breakthrough of Kathi in Western Germany proved to be difficult – without sufficient communication support.
Based on innovative market research insights, Kathi was repositioned in the year 2005 as „Die Familie feiner Backideen“ („The family (owned company) with the delicious baking ideas“) which enhances the image of the wide product range. Given the very limited a&p budget the modern three dimensional re-launch of packaging design proved to be very effective in East Germany.
Innovative product ideas such as the „soccer cake“ („Fußballtorte“) or the „Händel cake“ (the great musician Händel lived in Halle, where Kathi is situated, before he moved on to London) succeeded to achieve distribution, impact and sales effects also in West Germany. Additionally spicy pizza and onion tarts are successful as well as diabetic cakes and easy to prepare baking mixtures for children.
Another exiting route to success is the cooperation with Halloren, which also is based in Halle. This co-branding initiative capitalises Halloren’s larger distribution of approximately forty percent in the West.
Overall, Kathi has achieved sustainable double digit growth rates. Since the reunification Kathi’s turn over has multiplied by more than ten times.
U. Käckenhoff: Backe, backe Kuchen, Markenartikel 11/2009 S. 28 ff.