Functional and sugar-free gums are predicted to see strong growth through 2014, tapping into the increasing demand for health-oriented products.
By Howard Riell, Associate Editor.
Gum manufacturers are giving Americans more healthy options, additional flavors and better packaging, creating an opportunity for category managers to remerchandise the candy aisle to capitalize on this exciting product revolution.
With prices having topped out and usage having reached, according to some, a saturation point, manufacturers are shifting gears to jump-start growth by tapping into Americans’ unquenchable thirst for better-for-you products. As a result, new “functional” gums give consumers another reason to buy gum, and to feel better about themselves.
Analysts have predicted that sugar-free and functional gums will experience solid growth through at least 2014, drawing on the booming demand for health-oriented products.
The Changing Market
The mergers of Mars with Wrigley and Kraft with Cadbury, has resulted in the creation of multi-national gum behemoths that account for a combined 65% of gum sales worldwide, according to Euromonitor. The inevitable result will be increased marketing efforts to drive store sales.
Overall, worldwide gum sales over the past decade have jumped 37%, to more than $24 billion. At the same time, however, sugar-free gum sales slowed in the past 18 months due to both the recession and higher retail prices that reached as $1.49 in most markets. Chicago-based SymphonyIRI Group noted that sugar-free gum sales rose just 3% to $2.3 billion last year, lagging behind the 4% growth in 2009.
“Gum is the new delivery system for benefits, whether it’s breath-freshening or teeth-cleaning, relaxation or just excitement because of new, unusual or interesting flavors,” said Lynn Dornblaser, director of CPG insight at Mintel International. Among the new gums to hit store shelves are varieties that change flavor as you chew, provide vitamin C and offer a lower-calorie substitute for dessert.
Wrigley and Trident, the leading global brands, both launched new functional gums in early 2011. Wrigley relaunched its premium Extra Ice range complete with reportedly improved oral care benefits. The Extra Ice White variety joins Peppermint and Spearmint. Each contains microgranules, a new speckled coating, and Xylitol, according to the company. The company’s Extra Dessert Delights is intended to take the place of desserts by providing flavors like chocolate mint chip and Key lime pie.
Cadbury, which makes Trident sugar-free gum, rolled Trident Vitality, which is available in three flavors: Vigorate (citrus and strawberry), Rejuve (mint and white tea) and Awaken (peppermint and ginseng). Each contains 10% of the daily requirement of vitamin C per stick. Packaging is part of its appeal, offering a sleek look and trademark “click” when opened or closed. The full box, with a blister pack inside, closes to keep the blister pack secure.
Support for the launch at retail included television, print, in-store marketing, online and viral media, plus a 20-market sampling tour and strategic national partnerships, the company said. The products carry a suggested retail price of $1.29 per single-pack and $2.89 per three-pack.
Packaging, in many cases, has become larger and has made it harder for product to spill into women’s purses, as well. Sugar-free varieties have proliferated and growth is being aided by increased flavor variety.
The Next Big Thing?
“Functional food does continue to see growth,” said Jeff Lenard, vice president of communications for NACS. “There are a slew of drinks that do more than just quench your thirst today—energy, relaxation, energy loss, etc.—and we have seen that trend continue with food. There are all kinds of energy products, from jelly beans and candy bars to sunflower seeds. The more you can pack benefits into a product, the more you can attract customers to your product.”
The annual NACS Show in October tends to be the starting point for many of these functional products which c-stores can expect to see hit shelves within the next year.
“I think confections that deliver healthy benefits have been the next big thing for the past 10 years,” noted Bernard Pacyniak, editor-in-chief of Candy Industry, a confections trade magazine. “It’s still a niche, but on the gum side it’s probably a larger niche than anywhere else because it’s easier to deliver a variety of benefits. To what extent will that grow? No one knows. But one thing is for sure, if retailers promote it successfully, it usually sells.”
While Pacyniak admitted he doesn’t yet see a wave of popularity building for functional gums, he conceded: “Sometimes the multi-nationals can create the wave. If they have a large marketing campaign that causes some excitement, it may create a wave. That may be why Wrigley has such a large marketing program with the debut of this gum.”
Functional gum, according to Tim Cote, vice president of marketing for Plaid Pantries Inc., which operates 100 stores in Oregon and Washington, has not generated much excitement of late. “It has actually been pretty stagnant for us, only gaining a small share of the category to this point.” The chain’s top-selling product is Trident White.
The amount of shelf space the Beaverton, Ore.-based chain devotes to the sub-category has varied a bit over time, Cote pointed out. It currently stands at 12-15 facings on average, about 12% of the category.
“They are segmented within our gum and mint space, but other than grouping them together we have done nothing to call out the benefits of these items. To this point, the only items we have any success with have been the gums designed to make teeth whiter,” Cote said. No special promotional or merchandising efforts have, to date, been placed behind them, he added.
Pat Zelechoski, pricebook/category manager for the 32 NOCO Express stores in Tonawanda, N.Y., said she started adding functional gums to her store sets in February and sales are picking up.
“I am seeing reorders coming in through our wholesaler. Trident new Vitality has been a leader thus far,” Zelechoski said. “There are three varieties, one facing each. Two of the three are on a front counter display fixture.”
NOCO managers have put up new-item signage to herald their arrival, but there have been no price promotions as of yet for the functional products. Interestingly, Zelechoski noted, the purchasers have tended to be mostly women.
Where can functional gums go from here? “I think there is a need for them, especially with our busy schedules,” Zelechoski said. What will fuel their growth, she added, will be Americans’ yearning for healthful living.
Cote said he remains bullish on functional products in general, including gums. “There is a pretty good upside in delivering health benefits to customers via gum, but to this point our customers have not been willing to pay much of a premium for this functionality. I am expecting that my space for these gums will increase a bit going into fall as we adjust sets to accommodate new item launches.”
What will fuel the sub-category’s growth, Cote concluded, will be defeating a stigma similar to that with which convenience stores themselves have had to contend regarding the food they serve. “So far there has been a perception, real or imagined, that the functional gums do not taste as good as their traditional counterparts,” he said. “When manufacturers overcome this issue on functional gums—without having to increase the price gap between their products and traditional gums—the sub-category will benefit greatly. Once that is accomplished I don’t think there is a limit to what healthy ingredients functional gums can deliver.”