Gum Gone Wild

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Gum Gone Wild

By Renee M. Covino

Gum is gaining a pretty wild reputation throughout the c-store industry. Some retailers said it's getting harder to keep the little packs down as many of these SKUs, particularly of the sugarless variety, just can't stay put on their shelves.

"The category is exploding -- so much so it's becoming a challenge just to stay in stock," said John Strickland Jr., vice president of operations and general buyer for Wayne Oil Co., which operates Hasty Mart stores and is based in Goldsboro, N.C. Strickland pointed out the Stride gum products in particular "are really screaming out the door right now." He attributes that to the distinguishing feature the brand touts -- "the flavor lasts a very long time," he said. "It's not a chew and spit product."

Wayne Oil recently added an additional 20 percent of shelf space to the category to allow for the mostly sugarless gum growth, according to Strickland.

"Sugarless gum is very much alive here, too," agreed Chip Vann, buyer for Don Stewart Petroleum Inc. in Austin, Texas. "Lately, we've been carrying quite a bit more of it -- it's definitely where all the category innovation is coming from."

Chewing on the latest channel statistics -- gum represented 27.6 percent of all c-store candy and gum sales in 2007, according to the 2008 Convenience Store News Industry Report. What's more, gum sales increased 6.2 percent on a per-store basis last year.

Industrywide, the $3.2 billion gum category saw the highest manufacturer dollar sales growth rate in 2007 at 4.1 percent, compared to chocolate (2.9 percent) and non-chocolate (3.8 percent), as calculated by the National Confectioners Association (NCA) based on its monthly shipment reports and the U.S. Department of Commerce. But the biggest sales gains of the segment clearly go to the sugarless gum niche -- its retail sales grew by 13.5 percent last year, according to the NCA.

The surprising announcement this spring that Mars Inc. will acquire Wm. Wrigley Jr. Co. for approximately $23 billion in cash is very much in line with the fact that gum is the fastest growing sub-category within the entire candy realm.

Well-aligned with this bursting confectionery segment is the c-store trade. Currently, convenience stores top all other channels for sales of gum (a 22 percent share), according to Mintel, a market research firm in Chicago. The NCA agreed that while mass, supermarket and dollar channels were all currently experiencing slow overall candy growth, the convenience channel, along with drugstores, were doing very well and gaining share that the others were losing.

Generational Gum Plans
The collective body of c-stores seems to have a good handle on the entire market of gum chewers, with some chains noticing more of an "adult" gum-chewing crowd, and some targeting the category more to kids.

Wayne Oil skews much more to adults. "We don't get a lot of kids in here. They are clearly not our target customer," said Strickland. "So that explains why sugarless is going so well for us -- sugarless also skews more to females, I think, which we're seeing more of lately."

So when Wayne Oil added the 20 percent increase in category space, it was able to build the new planograms in an upwards configuration.

"We moved gum and mints directly to the top of our candy sets, which we developed with McLane Co.," Strickland maintained. The chain spends one week every year with its distributor "analyzing and optimizing SKU movements," he said.

"It's a mind-numbing, but wonderful process," he admitted. "It works for us."

Indeed, Wayne Oil has already experienced "a 15 percent lift" in the category, and it's only been a few months since the changes were put in place.

At its recent annual trade show in Texas, McLane highlighted a mock-up "C-store Profit Mart," which featured the "best of the best" in category planogramming, and gum and mints were neatly positioned atop an 8-foot candy section, much the way Wayne Oil recently reconfigured its category space.

Don Stewart Petroleum has also positioned much of its sugarless gum atop the candy aisles, specifically atop the candy bar shelves, according to Vann. But the chain also takes into consideration its kid clientele -- and for them, the non-sugarless gum is merchandised up-front.

"The sugar-based gums, or the 'kid gums' as a lot of people call it, is what we put at the front by the registers," Vann explained. "That's where we've got the Bubblicious, Juicy Fruit and the five-cent Super Bubble gums. It works well for us to separate the two types."

Of course for some c-stores, "kid" candy and gum is entirely where the category is at -- and so these gum sections look very different from those that target the adult consumers.

"Gum is a good category for us, but sugar still wins here," Jim Schacklett, general buyer of Shay Oil Inc., based in Yuma, Ariz., stated. "We've got lots of kids and lots of Hispanic customers."

So rather than merchandising up, Schacklett merchandises down. "I get it down as low as possible so the children can see it," he said. "We're extremely kid-friendly in here."

Perhaps an even more obvious kid-friendly chain is owned by Leisure Systems Inc., the Milford, Ohio-based operator of 70 Jellystone Park c-stores and souvenir shops.

"Because we have so many kids in here, we stick to the more traditional type of gum," Shelia Isaac, buyer for the chain, explained. "We've got the [traditional] stuff in here like Wrigley's Juicy Fruit and Doublemint gum -- the full sugar brands -- and we've got them merchandised mostly right at the checkout."

And the Wrigley brands now feature "rejuvenated," slimmer packaging (consistent with sugarless brands) that many c-store buyers said fit better on store shelves, and sport new fonts that appeal to a younger audience.

Fruity Attraction
Looking at gum line extensions, fruity flavors, or "zany" as Vann refers to them, are the hottest craze currently, bursting forth from both sugarless and sugar-based gum brands. While fruit-flavored gum was always thought of as a kid-gum concoction, sugarless contenders such as Orbit, 5 and Stride, have come up with "more adult" fruit-flavor attractions.

For the future, fortified gum products are expected to continue growing the category. Recently, gums have been formulated to contain a range of ingredients, including vitamins and probiotics.