A Not-So-Sticky Situation

Chewing gum is a standard part of any convenience store’s candy rack, but for retailers across the United States, the bubble burst several years ago. Gum sales have declined or been stagnant for some time, yet suppliers today aren’t gloomy about the product segment’s future. In fact, they are optimistic about what’s to come — and data shows they have reason to be.

“I think the gum category is clearly in a state of growth,” said Kurt Laufer, vice president of U.S. Customer Development Strategy at Wm. Wrigley Jr. Co., maker of Orbit, Eclipse, Extra, 5, Juicy Fruit and Big Red gum, among others.

He noted that week-to-week changes can be misleading without stepping back to view the bigger picture. “When I look at gum, [it is] flat on a 52-[week basis], up in a 26-[week basis] and accelerating on a 12-week basis. The gum category is definitely back in growth.”

Other gum manufacturers agree. The Hershey Co., maker of Ice Breakers and Bubble Yum, reported gum growth of 1.7 percent year to date ending June 13, driven by new products and the top 20 brands. Additionally, Mondelēz International Inc., maker of Stride and Trident, points to enhanced investment, pack type expansion, point-of-sale engagement and other growth drivers in a recovery that it says is fueled by base and incremental drivers.

“Categories will ebb and flow,” Laufer added. “We’re looking at trends.”

THE ROAD TO RECOVERY

What kickstarted this positive trend? Instead of trying a radically different slate of products or means of promoting them, actively placing a strong focus on the core of the gum segment and launching targeted media campaigns for the products within it have had a noticeable effect.

“It’s not just about throwing in flavor innovation and hoping that it works,” Laufer said. “The core has to be strong, and then you have to have news and innovation.”

However, gum’s recovery is not uniform across the segment. While the top products that make up the largest portion of total gum sales are doing well, older, lower-ranked products are declining and having a negative effect. To combat this, convenience store operators and their competitors have begun to weed out the weakest items for the segment’s overall benefit.

“When looking at these numbers from a retailer’s perspective, we found that retailers that have reduced underperforming gum items and oftentimes replaced [them] with mints or candy are benefiting. In fact, it’s those retailers that have helped turn around the gum category,” said Hershey’s Joey Hendrix, senior manager of category insights Geo C Store, global knowledge and insights.

“By taking out underperforming items and replacing them with mints or candy, the retailers saw their remaining gum items become more productive, which led to growth in the gum segment as we see now,” he continued.

To maximize efficiency, Hendrix recommends that as gum typically generates 17 to 20 percent of candy, gum and mint sales, c-store operators currently allocating more than 20 percent of shelf space to gum should reduce that percentage with better-performing mint or candy items.

WHAT CONSUMERS WANT

Beyond rearranging their offerings, retailers should also stay aware of how suppliers are reaching out to consumers, and who those consumers are, in order to coordinate promotional efforts.

Teenagers/young adult consumers now make up more than a quarter of total gum eatings in the United States. This figure is on the rise as gum brands promote themselves to this group through relevant channels such as social media and digital advertising.

“What happened for years was all the manufacturers, including Wrigley, kind of stepped away from new or innovation in that fun segment,” Laufer said. “At the end of the day, sometimes we forget that the confectionery business is an awfully fun category that we all participate in, yet the consumer doesn’t always think about it that way. You have to bring them reasons to be involved in the category. And younger people, they love gum.”

Successful “fun” gum products in recent years include Mondelez’s candy-flavored Stride gum, which has been co-branded with Swedish Fish and Sour Patch Kids.

Still, mint remains the favorite flavor type, a fact that doesn’t always match up with what’s on the shelves. Mint also offers a functional benefit by appealing to the large number of consumers interested in oral care.

“Another observation we’ve made is that mint-flavored gums are under-spaced,” Hendrix said. “They typically generate 70 percent of sales, but only get 60 percent of the space. Retailers should start optimizing their gum space and begin to find items that fill the gum flavor-space-to-sales gap.”

Ultimately, the future of gum is likely to be brighter if retailers develop a balanced offering of what consumers want in the segment.

“What [retailers] have to do is make sure they have the core items represented and the core brands so that they can benefit from the advertising,” Laufer said. “At the same time, shoppers or consumers walking into a c-store are going to expect to see some of the innovation against those core brands. So, [retailers] have to have a balance of making sure they have the core right and having the innovation in place while all the media plans are working in the marketplace.”