Gum

US: A sticky situation for gum

Sales of gum may have fallen to levels far beneath their most popular days, declining 2.7 percent in 2011 to $3.5-billion, but manufacturers are fighting to reverse the slide, according to a Wall Street Journal report. Smaller package sizes, alternative sales locations and a variety of new flavours are all part of that effort.

“We’ve made shopping for gum very complicated,” said Casey Keller, president of the North America division of Mars subsidiary, Wrigley. “On average, we have 50 different varieties of gum in a convenience store, and that’s just Wrigley.”

Aside from offering new flavours, Wrigley has also introduced smaller gum packs to avoid competing for pocket space, and recently tested gum sales inside a few Chicago Subway stores. “It exceeded our expectations,” Keller said.

Young people remain an important target for gum manufacturers. While a 2007 major marketing campaign for the 5 gum brand failed to attract new usage, Wrigley and other companies like Mondelez International are still working to target teenagers, as CSNews Online reported.

One of Wrigley’s other goals is to make gum fun for children again, according to the report. “Every kid remembers blowing bubbles. How do we bring back that fun and make it permissible?” Keller asked. A sugar-free bubble gum could do the trick for parents who avoid giving their children sugary products.

Wrigley is also doing more than sprucing up its product line; it’s researching when and why gum is chewed. Wrigley teamed up with The Princeton Review to survey US and Canadian college students and found that chewing gum provides a “stimulating effect” that can aid concentration. Forty-one percent of the students who chewed gum while studying for exams did so to combat stress, while 23 percent reported doing so to increase concentration.

Still, for all these efforts, gum is facing trouble. “To be frank, gum has been disappointing for quite some time and it is taking us longer to change the trajectory than we anticipated,” stated Mondelez CEO Irene Rosenfeld.

Why is gum on the downturn?

There are several possible reasons, such as a lack of category innovation and consumer resistance to price increases. The root cause might be more indirect.

“I think one of the bigger reasons for decline is the continued volume reduction of cigarettes being sold,” said Paul Casadont, Americas merchandising manager for Chevron’s ExtraMile convenience store chain. “Market basket data often shows high correlation with gum/mints and cigarette purchases, and with cigarette volumes continuing to decline, it’s not unexpected that gum and mint sales would decline as well.”

Casadont noted that many tobacco users have switched to other tobacco products (OTP), a category that is seeing strong growth in c-stores. “Some of these other tobacco products being purchased are similar to gum or mints, he said, “so these consumers may not be purchasing gum or mints as a result.”

And he isn’t the only one to see a possible connection between mints and OTP. In September, the Colorado Department of Health requested that RJ Reynolds voluntarily stop selling dissolvable tobacco products, such as its Camel Orbs, within the state’s borders, citing the potential that they might be confused for mint candy.

In the eyes of at least one candy supplier, however, the reason for the decline of gum is more straightforward. “The gum category is experiencing softness given the economy and lower consumer spending. Fewer trips to the store mean fewer gum purchases,” said Jennifer Jackson-Luth, Wrigley’s senior manager, North American corporate affairs.

Source: CNS News