Something to chew on

It’s a nailed-on fact that every retailer could be making a lot more revenue and profit from gum sales  if they understood what makes the category really tick and took some simple steps to encourage impulse purchases.

Asian Trader joined Mars Wrigley recently for a (virtual) in-depth discussion about how retailers can grab a piece of the estimated £60 million of revenue lying unclaimed on the counter, as it were.

What is the most profitable grocery category? Cigarettes? Alcohol? Batteries? Fillet steak? No – it’s the humble stick (or increasingly “pellets”) of chewing or bubble gum. According to Nielsen, the category is worth an annual £260 million in the UK, and it is easier to turn a profit with gum than almost any other class of product.

The UK now has to catch up with gum sales in Germany, themselves up by +50m trips per year, and where 1.4 per cent more trips result in gum conversion (the UK lags at 1.1 per cent conversion). Germany has 46 per cent gum penetration by household, compared to the UK’s 36 per cent – and that difference is where the new revenue lies.

As with everything else this year, the pandemic has had a big effect on consumer habits with regard to gum – people usually chew it when they’re out and about and at work. Ted Collins, Country Development Head for Mars Wrigley UK explained that in order to sell more gum, we need to understand how the gum occasion has transformed under recent conditions.

There will clearly  be a shift to more at-home consumption, together with increased purchase of trusted and quality brands – a trend seen across retail. This goes hand-in-hand with the fact that everyone is a little cautious about life at the moment, and as a result there is a bit more suspicion, with trust harder to earn (so having a good brands helps). Finally, Ted explained that the psychology of stocking up on non-perishables is likely to continue for a while, and this could affect the way people buy gum, especially  bottle packs that can be stored easily.

What is gum, again?

The good news is about the category and where gum sits within it, being halfway between a snack and a treat. Ted defines a treat as an event or an item that is out of the ordinary and gives great pleasure, whereas a snack is just a small amount of food eaten between meals in a casual manner.

Gum really is in-between – a sort of refreshing treat, but one you chew on like a snack to keep your mouth occupied between meals and maybe fool your stomach. But gum is also seen as confectionery (which includes gum and mints, chocolates and fruity sweets) because of the sheer scale of its presence in our lives and in the category itself – a £6 billion category growing at a five-year CAGR  of 1.7 per cent – not rocket-fuelled but steady and recession-proofed.

“Confectionery is absolutely enormous,” says Collins, “so enormous that it smashes double-digit growth across the majority of other categories we see in front of us.We know that when we talk about confectionery, 98 per cent of UK households buy into it and there’s huge opportunity in terms of growth going forward.” In fact Wrigley’s Extra, just on its own, is the fourth biggest confectionery brand – “And that’s up against the likes of Maltesers and Galaxy!”

“Mints and gum play a key role in driving the confectionery category, representing around a third of the market,” says Mark Roberts, Trade Marketing Manager at Perfetti Van Melle, underlining just how significant gum sales can be.

“Gum is an incredibly unique proposition,” says Ted. “So if you want to freshen your breath, you’re not buying a pack of crisps. If you want to refresh and energise while you’re on the go, driving in the car, are you going to be buying into ice cream? Potentially not. We play a unique role when people are consuming. We need to make sure we’re tapping into every moment and helping people with their day to day lives”

Even beyond this, gum is part of health and oral hygiene, which is also a great boost. As chewers seek out a healthy addition to their day-to-day oral care routine the trend towards sugar-free gum has continued: 80 per cent of women are more concerned about tooth loss and oral health than weight gain (UltraDEX), while 16-34 year olds are more likely to be concerned with oral health when compared to other age groups (Mintel), the latter including the key “Gen Z” growth market for gum, according to Profolio Director, Dan Newell.

Gum is a perfect meeting of taste and health, and Roberts notes that “95 per cent of all gum [is] already being sugar-free, but there is still room for growth. Retailers need to ensure that their offering includes a strong range of no and reduced sugar alternatives across all formats to capitalise on growing demand and increase sales.”

He recommends that “Classic flavours such as peppermint and spearmint continue to be popular within the category, but new unconventional flavours should also be considered, as these engage a younger audience.” Exactly so, according to Dan Newell, who stresses the importance of fruity flavours and NPDs such as Extra Refreshers – a big hit this year – to woo the Gen Z consumers who now comprise nearly 50 per cent of gum consumption.

Selling gum in the “new normal”

Gum is “expandable”, in other words customers add it to their basket rather than choose it in place of something else. This has to do with the impulsive nature of gum purchases and it means that generating lots of extra sales is very plausible if you do the right things.

So what is the strategy to start claiming the £60 million of sales as yet unsold? Mars Wrigley currently sells 300 million packs of gum per year and services eight billion consumer consumption occasions. It’s the changing nature of those occasions, and the development of the new opportunities, that will add the extra 2.5 million households to the target for gaining the new revenue.

The elephant in room is Covid but it can be an opportunity: the virus has altered “gum moments” – more gum is now being bought online (+53 per cent home delivery) and click+collect (+80 per cent) as a result of the pandemic.

“[The pandemic] impacted the way we shop,” says Newell. “If we look at overall trips, they are massively down: trip down bias is 41 per cent in the FMCG category”

And where people are shopping is highly significant, he says. “We can see people’s shop shifting into co-ops and symbols as they can’t get into some of the bigger grocers– and this is where gum plays an absolutely incredible role as a basket builder.”

In terms of gum occasions, there is less chewing in cars, at work and school, and outdoors (-60 per cent) – but much more at home , which in itself implies more occasions – because the consumer is in control and the potential for selling more, and larger packs is greater.

Newell outlined one huge new gum opportunity as being for fresh breath while wearing a mask (instead of socialising face to face – one that the company has taken advantage of with its “Mask Your Mask Breath” campaign over the summer.

Extra brand manager Sasha Storey revealed that the campaign placed assets on panels that were in close proximity to stores and used targeted social media to increase the frequency of that messaging. “As a result of that, it actually created a 5.1 per cent increase in gum sales versus stores that didn’t have the panels, a fantastic success, and we also saw a 0.8 per cent shopper repeat rate in stores, which had out of home panels versus stores that didn’t.”

“Be aware of which brands are being heavily supported by marketing,” confides Levi Boorer, Customer Development Director at Ferrero, “as this will drive consumer awareness which you can translate to sales and create multiple sighting opportunities in store at areas where shoppers dwell for longer periods – such as when queuing or when browsing the magazine fixture.”

Newell points out that 8/10 people buy at the “TZ zone” (the transaction area at or near the checkout) during pandemic and 87 per cent of gum shoppers are happy to buy at that location. Additionally the numbers break down like this: 31 per cent will buy while queuing, 22 per centat end of aisle, 20 per centat check-out and 20 per cent at the front of store.

Permanent displays are of great importance, as 51 per cent of customers only buy gum when it is visible in-store – purchases are overwhelmingly impulse, in other words, and people are “reminded” to buy gum by the sight of it.

Illuminated displays make a massive difference, says Newell, and they increased sales by between four and 13 per cent in one year when trialled in Germany and Poland. End of shelf/stand LED displays (perhaps rotating different messaging) added 24 per cent to sales, and overall, combined with a strong presence and clear branding, these elements can drive sales by up to +40 per cent!

Add to those assets new trends and PMPs for soft gum and fruity flavours (again a Gen Z passion) and under current conditions gum sales have the potential to take off.

Newell believes that pre-lockdown behaviours will slowly return but there will remain a subconscious distancing and there needs to be a way to take advantage for impulse conversion: “We need to look at displays in new locations, self-service and self-scan, and placed next to safety screens etc.”He emphasises that shoppers expect gum at all transaction moments as they fulfil “immediacy needs” and that taking full advantage of this impulse moment is they secret of improving sales.

And above all? “An empty tray of gum will not sell a product. So we need to make sure that gum availability is absolutely number one priority.”