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When Wm. Wrigley Jr. Co. bought the Life Savers and Altoids candy brands earlier this year, many analysts said the chewing gum maker was going on a buying spree to take a bigger bite out of the candy market But at the recent opening of a $45 million research facility in Chicago, CEO Bill Wrigley Jr. gave them something else to chew on: Future growth also hinges on concocting new gums and candies -- along with some twists on old favorites, the Associated Press reports.
"What has driven our business ... is innovation and new ideas," he said. "Consumers want to see new things. It's a constant race."
The popularity of sugar-free gum brands that promise to whiten teeth or fight tooth decay has made the gum market a sought-after category for confection companies, according to the article.
U.S. gum sales rose 6 percent to $1.04 billion for the 52 weeks ended Aug. 7, according to Information Resources Inc. Sugar-free brands grew 8.2 percent and accounted for more than 70 percent of U.S. gum sales.
Wrigley Jr., the 41-year-old great grandson of founder William Wrigley Jr., has boosted product development since taking over in 1999. Its 14 brands include three top U.S. gum brands -- Extra, Orbit and Eclipse.
This summer, Cadbury Schweppes plc launched a sugarless gum with a liquid center, Trident Splash. "Our view is that we've out-innovated Wrigley," a Cadbury spokesperson said. The company expects to open its own new science and technology center in New Jersey in December.
Wrigley plans to grow earnings 9 to 11 percent a year, by dominating the candy aisles in the 180 countries it now serves and expanding into candy -- Eclipse is also a mint, for example. Profits were up 11 percent last year.
"There are a lot more sales to be had in the confectionery aisle," Morningstar analyst Mitchell Corwin said, telling AP chewing gum represents 13 percent of global confection sales. "Wrigley now is not shy about making acquisition and I think there will be more in the future."