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March 22, 2014

Chew on this: Gum loses its pop

(Continued)

It may be why Mars said its gum declines have been most significant with people who are 25 and younger. In the meantime, Altoids mints, Welch's Fruit Snacks and countless other options have taken up space in the checkout aisles where most gum is purchased.

Since peaking in 2009, U.S. gum sales have fallen 11 percent to $3.71 billion last year, according to market researcher Euromonitor International. That's even as overall candy sales — including gum, chocolate, mints and licorice — have climbed 10 percent to $31.53 billion.

Over the next five years, Euromonitor projects gum sales will drop another 4 percent to $3.56 billion.

Hershey, which makes Reese's, Kit Kat and Almond Joy, is taking data to retailers to illustrate the slowing demand for gum. The idea is to encourage them to devote less of their candy aisles to it, and perhaps make way for more of its own products. Hershey, which also makes Ice Breakers mints and gum, is planning another blow against gum: This fall, it's slated to roll out a version of Ice Breakers that "chews like a gum, but dissolves like a mint."

Steven Schiller, global head of Hershey's non-chocolate candies including mints, said it gives gum chewers an alternative that doesn't require "disposal" at the end.

Gum makers are strategizing too. The maker of Trident, whose total gum sales were down as much as 16 percent in developed markets at one point last year, has an online campaign reminding people to run through the mental checklist before leaving the house: "phone, keys, gum."

"We know when people have gum in their pocket or backpack or desk, they're much more likely to chew it," said Stephanie Wilkes, who heads the North American candy business for Mondelez, the No. 2 player in gum with Trident, Dentyne and Bubbalicious.

Mars, which makes Big Red, Doublemint, Juicy Fruit and Orbit, is testing illuminated racks in candy aisles to make its gum and candy stand out more. The company said the racks have led to a 10 to 30 percent sales increase in tests.

And after years of slowly vanishing from shelves, Bazooka bubble gum last year relaunched its brand with new marketing and packaging. Distribution has since rebounded.

Still, executives are realistic about gum's turnaround prospects.

"We're not expecting any dramatic recovery in the category anytime soon," Mondelez CEO Irene Rosenfeld said during an earnings call last month.

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Follow Candice Choi at www.twitter.com/candicechoi

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