Focus On Confectionery: Gum raises its game

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Perfetti van Melle bids to steal the number two spot from Cadbury. Vince Bamford reports

There can be few categories as dominated by a single company as gum. Wrigley has an 88.5% share of the market [Nielsen 52w/e 13 August] most of that held by its Extra brand so the health of the category is very much dependent on its performance.

It’s a good sign, then, that Wrigley is feeling optimistic despite sales of gum falling 4.8% by volume [Kantar Worldpanel 52w/e 10 July] while a shift to premium products has prevented a worse fall in value falling sales are down 0.1% year-on-year.

Although Extra is growing 6% by value year-on-year [Nielsen 52w/e 13 August], many brands remain in decline, yet Wrigley isn’t alone in its optimism. Italy’s number one gum producer, Perfetti Van Melle, is feeling so confident in its soaring Mentos brand that earlier this year it declared its ambition to steal the number two spot in the UK market from Cadbury’s Trident brand. Suppliers are far more confident than they were a couple of years ago, when much of the market was in free fall. A flurry of NPD heralded by the arrival of Trident had breathed short-lived life back into a tired market in 2007, but the category was in decline again by 2009. “The strong focus on new product development, supported by heavy marketing, drove strong category growth but was not sustainable,” says a spokesman for Cadbury owner Kraft.

Wrigley’s answer to the slump was the launch of a back-to-basics approach in 2010 that aimed to cut through the noise of the earlier NPD and give people a clear reason to chew gum and stem the 3% decline in sales recorded last year [SymphonyIRI 52w/e 17 July 2010].

“Extra is the engine of the category and to get the category back into growth we had to get Extra back in growth,” says Wrigley sales director Duncan McCulloch.

Key to this has been the promotion of the oral health benefits of chewing gum primarily through the Food Creatures ad campaign, which pushed the message that chewing gum could help keep teeth clean, and was extended this March to promote premium extension Extra Ice.

Rolled out in February following European Food Safety Authority approval of health claims relating to the dental health benefits of sugar-free gum, the three-strong Ice range has British Dental Health Foundation accreditation and costs about 10p more than standard Extra. “Shoppers are willing to pay more for such innovation,” claims McCulloch.

Indeed, the product development contributed to the 6% rise in sales of Extra, says Wrigley, despite a slow start to sales this year. “Performance was poor early in the year as the weather and promotions drove footfall to grocery and away from impulse a key market for us,” says McCulloch.

The shift from impulse has made trading tough for the other Wrigley brands over the past 12 months. Airwaves fell 2.1% to £32m [Nielsen 52w/e 13 August 2011], while Orbit crashed 14.7% to £16.6m, primarily as a result of Wrigley axing two variants to focus on its core spearmint and peppermint lines.

Trendy gum brand Five has fared worse, falling 24.2% to £7.2m, although McCulloch says new flavour Wild Berry has done well since its launch in January. The Cadbury gums have had a tougher time still, with range consolidation pushing Trident down 40.6% to £8.2m and Trebor declining 22.5% to £5.5m as the company focuses on the brand’s mint products at the expense of its gum lines.

However, gum is still an important part of the Kraft portfolio, maintains Kraft UK & Ireland president Nick Bunker. The company is looking closely at how its performance can be improved in the UK, he says, adding that it was “extremely unlikely” that Cadbury would withdraw from the UK gum business. “We’ve had some learnings for Trebor and Trident from the UK and from our successes in Europe,” he says. “We have strong brand equities to build on, especially with Trebor.”

But Kraft is going to have a fight on its hands, with Perfetti Van Melle, a significant player in many markets globally, aiming to wrest away its number two spot in the UK. Sales of its Mentos gum have grown 28.1% year-on-year to £7.2m, and the line-up was extended with the launch of Mentos 3 Layer this year.

“We see the outlook for the gum market as extremely positive, with plenty of room still for NPD,” says Mentos brand manager Aimee Reason. Such confidence in the overall gum category will, along with increased competition, ensure retailers and consumers have plenty to chew over in coming months.

Focus On Confectionery

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