Gum makers chewing on ways to blow up sales
Wrigley launches an ad campaign for Extra that tries to broaden the brand’s appeal.
CHICAGO — “Who wants gum?” was a question asked in countless Trident commercials over the years. Now stuck in a multiyear sales slide, gum manufacturers are asking themselves the same thing.
With teenagers, the core chewing constituency, increasingly bypassing the gum aisle, Chicago-based Wrigley launched a new ad campaign for its Extra brand reaching for broader appeal — and perhaps a few tears.
Eschewing functional benefits — fresh breath, dental hygiene and weight loss — the evocative television spots represent a dramatic departure from the pack. In a series of scenes, a father shares Extra gum with his daughter as she grows up, making origami cranes out of the wrappers. While she is packing up to leave the nest for college, a box of origami cranes spills out of her car, a poignant moment reflecting a bond that goes far beyond gum.
“This really hits on the emotional reasons that people chew gum,” said Anne Marie Splitstone, senior gum category director at Wrigley. “I’m trying to get everyone who’s interested in gum to remember this consumer truth about liking to share gum, and the little simple pleasures of doing so.”
The theme of the campaign, “sometimes the little things last the longest,” is an evolution of Extra’s traditional positioning of longlasting flavor and a new direction for gum advertising, where cutting-edge and comedic messages abound.
Although it remains to be seen whether the new campaign will be successful, analysts believe that the gum category will have to increase ad spending, raise its profile and reposition itself to energize stagnant demand. Gum sales have steadily declined since 2010 because of a confusing proliferation of brands, higher prices and a lack of pocket change among teenagers.
“The unemployment rate has been high; consumers tend to chew gum while they’re working,” Morningstar analyst Erin Lash said. “And the unemployment rate is even higher among teens, who tend to be heavy users of gum.”
The downturn hits close to home in Chicago, the unofficial gum capital of the world with Wrigley and Mondelez International Inc. — the top two manufacturers — both based in the area. To- gether they represent about 90% of U.S. gum sales, which last year totaled $3.38 billion, according to IRI, a Chicago market research firm.
Sugarless gum accounts for 84% of sales, with Wrigley’s Orbit leading the way at $454 million, followed by Mondelez’s top brand, Trident, whose sales total about $403 million through the 52 weeks that ended Aug. 11, according to IRI.
Wrigley was founded in Chicago by William Wrigley Jr. in 1891 as a soap company. It started producing gum the next year, launching such iconic brands as Juicy Fruit and Spearmint shortly thereafter. More than a century later, Wrigley remains the world’s largest gum maker, with Orbit, Extra and 5 among its top-selling brands. In 2008, Wrigley was acquired by the privately held Mars Inc. candy company of McLean, Va., for $23 billion.
Deerfield, Ill.-based Mondelez, an international snacks business that emerged from last year’s split of Kraft Foods Group Inc., is a more recent but nearly as significant player in the gum world. In 2010, Kraft acquired Cadbury in a $19-billion deal, adding top gum brands Trident, Stride and Dentyne to its portfolio.
Credit Suisse analyst Robert Moskow said chewing gum has suffered from a lack of management and investment since Mars took over Wrigley and Mondelez took over Cadbury.
“These are two very big confectionary companies, and it makes all the sense in the world that they would have some synergies with chewing gum, but chewing gum is a very different kind of category,” Moskow said. “Something got lost in the translation as they tried to integrate chewing gum.”
U.S. gum sales are down more than $300 million since 2010, and the decline is accelerating this year. Sales fell 6.4% to $3.24 billion through the 52 weeks that ended Aug. 11, according to IRI.
Among the problems, according to Moskow, has been an overwhelming number of choices at the checkout line, such as faux pie dessert substitutes and flavor-changing gum. Wrigley experienced a flameout in May when one of those varieties, its Alert caffeinated gum, was pulled from the market after the Food and Drug Administration announced an investigation into the effect of additional caffeine consumption on children. The company said it has paused production, sales and marketing of Alert and will reassess the situation early in 2015.
A bigger problem may be decreased overall advertising spending, which has declined along with sales. Gum advertisers spent $204 million on measured media last year, down from $218 million in 2011, according to Kantar Media. In 2010, gum advertising was nearly $287 million.
Wrigley spent nearly $116 million on advertising last year, investing about $35 million each in 5 and Orbit, and $19 million in Extra, according to Kantar. Those budgets will be boosted as the new Extra campaign expands into digital and print by the end of the year, Wrigley’s Splitstone said.
Extra was introduced in 1984 as the company’s first sugar-free brand in the U.S.
The new campaign was created by Wrigley’s longtime advertising agency, Chicago-based Energy BBDO. Charged with broadening Extra’s appeal, Energy BBDO developed the idea for the inaugural spot by contemplating a ritual that Jimmy Dietzen, a creative director at Energy BBDO, engages in every Saturday morning — taking his daughter out to breakfast.
“Handing somebody a stick of gum is a seemingly really small thing,” said Rick Hamann, group creative director. “But your relationship with other people is a collection of small gestures, and those small gestures can add up to being really big, important things in life.”