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What Will It Take To Save The Sector?

Package of stick gum.
July 9, 2014
by Candy & Snack TODAY

It’s no secret gum sales have been challenged in recent years, with industry experts and analysts suggesting everything from dwindling pocket space to consumers switching product segments as the culprits.

“Everyone is trying to figure out what went wrong, but no one can put their finger on one reason,” Mehmet Yuksek, president and CEO of Perfetti van Melle USA, Inc., tells Candy & Snack TODAY.

During the past year, segment sales slipped nearly six percent, according to Sweet Insights, and Mintel Group Ltd. anticipates a tumble of nine percent between 2013 and 2018. However, the researcher notes these declines can be mitigated through relevant product innovation and by increasing consumer awareness for the segment.

One challenge facing gum is the increase in consumer distractions in the front ends and check lanes, according to Caroline M. Sherman, U.S. manager of marketing communications for Wm. Wrigley Jr. Co.

“The front end of the store is more complex than it used to be as shoppers are making transactions in new ways such as self-checkout and with mobile devices,” she says. “Additionally, our share of voice in impulse advertising has decreased, in part because of new outside categories, such as personal care, entertainment and food, that now share the impulse space.”

product shot of 5 Gum

Sherman adds that more needs to be done to improve merchandising in self-checkout and other front end lanes to make gum easier to find and more prominent.

Deborah Schimberg, president of Glee Gum’s parent company, Verve, Inc., sees other possibilities that led to the decline, including the rising price of gum lowering the value proposition for shoppers and the segment’s main consumer group purchasing in other segments. “Women 18 to 44, who chew a disproportionate amount of gum, are really looking for snack items that are healthier,” she explains. “Conventional gum features, such as aspartame, artificial color and flavors — these shoppers are looking for alternative ingredients.”

Yuksek adds the strength of innovation has not been on par with what it was between 1998 and 2008, when gum sales were surging.

Sherman agrees on this point, noting there are too many brands and flavors cluttering shelves that don’t build new occasions to chew gum. She explains that to remedy this, Wrigley is working to simplify its product selection, while focusing to ensure top-selling brands are being offered in packaging, sizes and prices that meet shoppers’ needs. 

“Consumers want a certain level of variety, but we need to manage that more effectively while focusing on occasions to chew,” she adds. For example, she says sales data show by adding a wintermint-flavored item to an established brand, it can help encourage purchases.

Another factor leading to the decline, according to Euromonitor International, Inc. U.S. Analyst Matthew Hudak, was the advent of mints with highly effective breath-freshening abilities, which led to consumers switching segments to meet that particular need.

“On top of that, for years now there have been fewer occasions to chew gum,” he adds, explaining this is particularly true among younger consumers, who have less pocket money and are forbidden from using the products in school.

“Bubble gum in general has not been doing well. It’s a gum type that caters to kids and kids are more into other candies now, such as gummies and chews,” Hudak adds. “If they don’t get into the habit of chewing gum when they are growing up, they aren’t likely to pick it up later in life.”

“It’s changing consumer habits,” confirms Schimberg. “When I was a kid we all chewed gum, but now people have different habits and different alternatives.”

Reaching Young Adults

To position the segment to better meet the needs of young adults, Sherman says products should be developed to appeal to their unique lifestyles and “ensure they are sold where younger consumers hang out and shop.”

Regularly reinforcing the reasons to chew gum is critical in staying top of mind with shoppers, which ultimately leads to sales, says Julia Marget, Mondelez International, Inc. spokesperson.

“Taking a straightforward approach to providing consumers with clear reasons to incorporate gum into their day-to-day routines is critical to getting people chewing regularly,” she adds.

To accomplish this, Mondelez is working to position its gum products as part of consumers’ “gear,” or items people don’t leave the house without, such as cell phones and keys.

“We did an experiment this past year tying gum into consumers ‘preparation routine’ or pre-departure pat down,” she tells Candy & Snack TODAY. “Many people, if not all, have a couple of critical items they check for before leaving the house. From our point of view, gum deserves to be part of the ritual.”

She adds testing on a marketing campaign promoting “phone, keys, gum” showed that reminding consumers to make gum part of their habits had a material impact on sales. “Based on information from the markets in which we piloted, we saw an almost two-point swing in total segment consumption,” she adds.

Market Bright Spots

While the overall market has dimmed, it’s not without its winners. This past year 83 of the top 200 gum brands experienced growth, 57 of them with double-digit gains, according to Sweet Insights.

Euromonitor’s Hudak says some of the growth could be from the segment plateauing after a few years of decline. “There are some brands that look as if they are coming back, but it could be a function of them leveling off after so many years of decline,” he says, adding: “Although part of that could be coming back after a pretty big drop.”

Yuksek says brand loyalty in the segment is strikingly low, but adds: “Without branding you wouldn’t be able to form your own character.  Branding is important, but it isn’t the only decision factor. When you build a brand you build certain credentials, and you have to live up to expectations.”

This requires a combination of elements, including product, packaging and the value proposition, to come together, he says, explaining: “If one leg is weak the whole thing is weaker and all the winning parts will suffer. Branding, per se, is not the answer; it’s a combo of great product, packs, proposition and relevance.”

The brightest part of the market has been pellet gums in plastic bottles, Yuksek says. “If not for that format, we would have seen a much steeper decline,” he asserts. “That tells a little bit about what consumers find relevant.”

Because of their convenience and value, bottle packs resonate with consumers, he explains, but goes on to say: “This would mean nothing if you have a mediocre product in that packaging. Anybody out there in any business should really strive to win the hearts and minds of consumers with the product first.”

In addition, car cup holder-friendly packs are popular among older consumers and professionals, according to Hudak. “Some of them are using the product to the pass time while driving, while others want to freshen their breath on the go,” he explains, adding breath freshening gum did better during the segment’s recent turbulent period.

Glee’s Schimberg adds that reclosable pouches are beginning to gain popularity, something she likens to bottle packs. “It’s not just a pack of gum with a few pieces,” she says. “It’s the multiple-use pack option that helps.”

While convenient pack options help sales, delivering on a promise is paramount for repeat purchases, and can be accomplished through a back-to-basics approach, according to Jay Klein, founder and CEO of Pur Gum maker Action Candy Co. This includes focusing on benefits such as fresh breath, oral care and appealing to consumers on restricted or special diets.

Concerning breath freshening, Beth Bloom, food and drink analyst for Mintel, notes this benefit and eliminating bad tastes from the mouth were among the most pressing reasons consumers say they buy gum.

Positioning Benefits For Success

“While shoppers are interested in flavor innovations, a product really has to freshen breath to be useful for consumers,” she adds. 

Further, flavor innovations around mint, such as vanilla and ginger varieties, are adding to the assortment while still delivering on the key consumer desire for gum products, Bloom explains.

Wrigley’s Sherman says focusing on long-term, sustainable solutions will restore the segment to health, giving as an example promoting the proven oral care benefits of chewing sugarfree gum.

“Retailers have a unique opportunity to remind their consumers of this,” she says of the oral benefits. “Sugarfree gum has been rigorously tested by the American Dental Association (ADA), which has recognized sugarfree gum for its oral health benefits.  As such, some of our gum brands show the ADA Seal of Acceptance on pack.”

Mondelez’s Marget notes the dental proposition is also important for the company, explaining: “We know that how your smile looks reflects on your self-confidence. With this in mind we are going back to functional messaging, specifically for Trident, that focuses on dentists’ recommendations and cavity prevention by chewing Trident for 20 minutes between meals.”

Despite ongoing efforts, functional gums haven’t found a strong foothold in the market yet, according

to Euromonitor’s Hudak. “Manufacturers have been trying to push other benefits. Trident tried with an antioxidant gum, but it didn’t resonate well.”

He explains this is because consumers found the claims hard to believe, perhaps because of the serving size and its impact on the amount of function one piece could deliver. “It might be because gum is only chewed and not fully digested,” he suggests, adding: “It’s also a function of how many added benefits you can pack into the product without impacting flavor.”

Improving In-Store Performance

Perfetti’s Yuksek says manufacturers and retailers need to stop leaning on what worked in the past in terms of merchandising and how that informs the decision-making process.

“We should look at opportunities in c-stores,” he gives as an example. “We know they are revamping their structures with fresh food and making the experience more wholesome. This is an opportunity for gum to be merchandised in different parts of stores.”

He says for gum to begin its march back, retailers also need to consider different adjacencies. “Everything from auto to dental and dairy,” he gives as examples. Second, he says retailers should be willing to give more voice to winning brands.

This was echoed by Wrigley’s Sherman, noting the oral care benefits of chewing sugarfree gum open the door to additional merchandising locations. 

“For the drug channel, for example, applicable areas include the pharmacy, oral care aisle and even the cosmetics counter. For grocery, adding secondary display locations that complement other offerings, such as in the deli or coffee sections, can help retailers increase potential to purchase as well,” she states. 

Mintel’s Bloom notes increasing snacking frequency opens additional merchandising opportunities as placing gum along with snacks can prompt consumers to pick up a pack.

“With the growth in snacking and small eating occasions, keeping gum products close to snacks is a good reminder that gum is an option,” she explains. “It can be the recommended ‘after snack’ to clean the palate.”

In addition, Bloom says fruit flavored gums can satisfy certain shoppers’ cravings, further opening cross-merchandising opportunities.  “Consumers are saying they are looking to satisfy a sweet craving, particularly in the candy aisle. If the product is a bit more indulgent, you could put it in a baked goods section of the store and present it as a lower-calorie alternative.”

In addition, the company is working closely with retailers to build better displays and an overall shopping experience.

Sherman says retailers can maximize performance using the shopper decision tree. “This ensures power brands are highly visible and allows assortment to be driven by sales performance.” 

She adds the company is working to build front-end sales through LED displays, which The Nielsen Co. says can increase performance in the area 10 to 12 percent. 

“Fifty-nine percent of shoppers said they didn’t consider purchasing items at the checkout because they either didn’t notice anything or didn’t think about it, according to a Grocery Front End study by Envirosell,” says Sherman. “The LED displays are intended to draw attention to confectionery and increase impulse purchases.”

Pur’s Klein says cross-category promotions can also be strong sales drivers, noting retailers can run 2/$2 or 5/$5 across product segments. “If consumers can pick up a beverage, gum and snack for one price, they’ll come back again tomorrow,” he says, adding the low ring on gum presents its own challenges. “Gum is a high transaction unit item, but doesn’t represent the same dollar amount as other items in the store.”

Whether it is through more convenient packs, a better value proposition or delivering on a benefit, sources agree revitalizing the segment will require a concerted effort by all players.

“Anytime you can bring a consumer back to chewing gum, it helps the segment,” says Klein. “We are certainly inspired and grateful for the other gums in the market that customers are buying. It’s a very big category and hurts everyone when the numbers slide. It’s important for everyone on our side of the table to make sure they have high-quality products that are accessible to consumers at a fair price.” CST

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