CATEGORY - GUMS

AGENDA
2

History & Fun Facts

Category trend
Channels/retailers driving the category
Top brands
Brands driving the category
Pricing Overview
Promotional Overview
Seasonality
Conclusion

HISTORY OF GUMS
3

Ancient Greeks chewed gum

thousands of years ago
Modern chewing gum was first
developed in the 1848
First Bubble gum was invented in
1928
Sugar free gums entered in 1950s
More than 1000 varieties in US
US & India statistics 182 v/s 4

FUN FACTS
4

Worlds oldest piece of gum is 9000

years old
Most Popular during World War 2
Illegal to chew gums in Singapore
Chewing on gum while cutting onions
can help a person from producing tears
Improves concentration & memory,
eases tension, smoking cessation
Total amount of gum sold in one year

CATEGORY GUM, TOTAL US FDMXDOLLAR SALES TREND

5
+7.9
%

In Millions
$1,136,295,936

$1,225,911,040

+6.2
%
$1,301,781,760

+5.8
%

+2.8
%

+0.6
%

$1,376,970,624 $1,415,308,160

$1,405,742,208
-1.2%
$758,478,144

The Gum Category is valued at $1.42 billions in the year 2010, posting a
growth of +2.8% vs. prior year. While in the latest 52 weeks ending July
2011, show relatively flat sales (slightly up, +0.6%) vs. prior year.

The category experienced gains in dollar sales over the 5 calendar years
while decline in growth rate can be seen each year.

According to recent research from Mintel, the gum, mints and breath
fresheners market has seen sales growing through the recession,
increasing over 10% since 2007, and is expected to continue

growing through 2014.

EGORY GUM, TOTAL US FDMX- UNIT/ VOLUME

PARISON
6

1,080,000,000
1,070,832,448
1,060,000,000
1,040,000,000
1,020,000,000
1,000,000,000
3,838,809,600
980,000,000
960,000,000

4,150,000,000
4,118,601,472
4,100,000,000

3.4%

+2.2
%

3,977,064,704

1,034,881,152
3,892,358,912

+1.4
%

2.5%

3,987,781,120

+0.3
%

-3%

1,009,252,224

978,469,248

3,950,000,000

+0.5
3,900,000,000
%

3,850,000,000
983,685,760
3,800,000,000
3,750,000,000

940,000,000
920,000,000
Year 2006

+3.34,050,000,000
%
4,000,000,000

3,700,000,000
Year 2007

Year 2008
Unit Sales

Year 2009

3,650,000,000
Year 2010

Volume Sales

The unit sales of Gum Category has reduced from 2006 to 2009 and only
a marginal increase(0.5%) is seen in 2010.
The volume sales of Gum Category has constantly seen positive growth
from 2006 through 2010.
It is also observed that the dollar sales of Gum Category has constantly
seen positive growth from 2006 through 2010.

CATEGORY GUM, TOTAL US FDMXPRICING TRENDS

Average Price Per Unit

Avg Price Per Unit

$1.06

Year 2006

+1
$1.18
1.6
%

Year 2007

+9.
1%
$1.41

+8.
9%

$1.29

Year 2008

Year 2009

+2.
4%

$1.44

Year 2010

Average Price Per Volume

+6.4
$0.31 %

$0.33

+3.9
%

+5.
5%
$0.35

0.5
$0.34
%

$0.30

Year 2006

Year 2007

Year 2008

Year 2009

Year 2010

The average
price per unit had
increased
substantially over
the time period
2006 to 2010.
But, the average
price per Volume
has not increased
on par with the
average price per
unit.
Basing on these
two observations
we can conclude
that the average
volume per unit
has increased in
the same time
period.

SALES TREND BY 13 WEEKS, 2006-2011

8

$400,000,000
$370,854,624
$365,653,888
$334,526,496
$330,342,016
$359,889,056
$359,091,392
$350,510,720
$318,742,656
$315,654,208
$344,910,528
$342,046,752
$340,451,584
$337,057,280
$329,513,600
$294,395,968
$289,840,000
$319,019,488
$317,893,792
$300,000,000
$304,329,920
$287,184,320
$277,970,336
$274,089,600
$250,000,000
$212,747,952
$206,178,896
$205,464,784
$200,863,136
$195,428,480
$188,078,512
$200,000,000
$183,720,432
$180,392,976
$173,828,048
$171,305,792
$200,729,424
$197,980,816
$196,815,136
$195,934,880
$192,475,728
$160,066,992
$181,692,400
$181,370,128
$175,571,664
$166,438,096
$165,392,544
$150,000,000
$160,971,728
Dollar Sales F/D/Mx
$350,000,000

$100,000,000

Dollar Sales FOOD

$101,855,840 Dollar Sales DRUG

$99,571,104
$96,963,360
$93,634,024
$93,502,696
$92,641,576
$92,134,176
$89,760,632
$89,387,648
$89,310,496
$86,625,408
$86,220,928
$86,058,120
$85,640,408
$84,683,016
$84,367,752
$79,304,672
$78,230,432
$76,894,136
$75,595,744
$71,495,288
$70,532,176
$50,000,000
$-

DOLLAR SALES CHANGE BY

CHANNEL
9

Latest 52 Weeks Ending Jul 10, 2011

DRUG

FOOD

F/D/Mx

$30,360,552

In
Million

$40,072,240

$87,683,552

DOLLAR SHARE OF FDMX

10

The dollar share for Total U.S food is about 57%, for Total U.S Drug
is about 27% and for Total U.S MassX is about 17% from 2006
through 2011.

16%

16%

17%

17%

16%

16%

16%

27%

26%

27%

27%

26%

26%

27%

TOTAL U.S. - MassX

TOTAL U.S. - DRUG
TOTAL U.S. - FOOD

57%

58%

57%

56%

57%

57%

57%

11

VENDORS DRIVING THE GUM

CATEGORY
F/D/MX, FOR 52 WE 10-7-11

Wrigleys
Sugarless gum
forms more than
49% of the dollar
CONCORD
CONFECTIONS
INC
REGULAR
GUM (NO SUGARLESS); 1.02
THE
HERSHEY
COMPANY
SUGARLESS
GUM;
2.76
PERFETTI VAN MELLE SUGARLESS GUM; 3.23
share
followed by
WILLIAM WRIGLEY JR. CO REGULAR GUM (NO SUGARLESS); 8.81
Kraft foods
sugarless gum.
The top 5 types of
WILLIAM WRIGLEY JR. CO SUGARLESS GUM; 49.59
gums form more
KRAFT FOODS INC SUGARLESS GUM; 31.33
than 95% of the
dollar share of
Total F/D/Mx
market.
It clearly shows
that the Sugarless
gum is more
popular than the No
Sugarless gum.

RETAILERS DRIVING THE CATEGORYTOP 10 RMAS

12

TARGET CORP RMA

TARGET TTL CORP-RMA
7%

13%

TARGET TTL W/O SUPER-RMA

9%
13%

9%

WALGREENS-CORPORATE W/ DUANE READE-RMA - DRUG

WALGREENS CORPORATE-RMA - DRUG

9%

11%
9%
9%

10%

CVS+LONGS CORPORATE TOTAL-RMA - DRUG

WALGREENS CORPORATE W/O PUERTO RICO-RMA - DRUG
KROGER CORPORATE-RMA - FOOD
CVS CORPORATE TOTAL-RMA - DRUG
KROGER COORDINATED-RMA - FOOD

The top 10 RMAs comprise about 33% dollar share of the all the RMAs put
together.
We can notice that Target has a share of 37% , Walgreens has a share of
29%, CVS has a share of 18% and Kroger has a share of 16% .

TOP BRANDS
13

Contributes 70% market share

Merchandising, Flavor & Packaging
Strategies
TOTAL U.S. - F/D/Mx 2007 to Latest
Dollar Sales (US$ Million)
WRIGLEYS 5 SUGARLESS

WRIGLEYS ECLIPSE SUGARLESS

WRIGLEYS EXTRA SUGARLESS
TRIDENT SUGARLESS
ORBIT SUGARLESS

404
450
557
643
926

14

BRANDS DRIVING THE

CATEGORY
Latest 52 Weeks Ending Jul 10, 2011Dollar Sales US$ Million
WRIGLEYS ECLIPSE SUGARLESS
WRIGLEYS 5 SUGARLESS
WRIGLEYS EXTRA SUGARLESS
TRIDENT SUGARLESS
ORBIT SUGARLESS
0
TOTAL U.S. - F/D/Mx
TOTAL U.S. - DRUG

50

100

150

TOTAL U.S. - FOOD

200

250

ANALYSIS
15

Top Brands are sugarless gum category

in Food, Drug & FDM x
Nutritional Benefits
37% of total sales are Incremental Sales
Constant Innovation
Convenience & Value
Brand Loyalty & Packaging

PRICING OVERVIEW - 2009

16

PRICING OVERVIEW - 2010

17

HOW EFFECTIVE WERE THE

PROMOTIONAL ACTIVITIES?
18

PROMOTIONAL OVERVIEW
19

Base dollar sales decreased by 1.6% compared to

year ago.
Incremental sales increased by 3.5%

BASE SALES
20

Base $ sales decreased by 1.6%

compared to year ago.

ACV weighted distribution =100%

Weighted average base price: One

standard volume of gum is priced
approximately at 43 cents during the non
promotion period. No change from year
ago.

Sales per million $ ACV has decreased by

$385

An average sized store size selling gum

stocks 157 units of gum reduced by 2
items compared to year ago

CONCLUSION: The marginal decrease in

INCREMENTAL SALES
21

8.5 % of total sales was contributed by total promotional activities.

17.6% any feature , 36.7 % any display, 3.7% feature and display, 42%
price reduction

%ACV figures for the promoted stores increased by 0.1%.

36.7% of total volume sold is the incremental volume sold due to

promotional activities. Note that feature & display together contribute 60%
of this incremental volume.

On display for 46 weeks.

EFFECT OF PROMOTIONS ON
PRICE
22

SEASONALITY
23

CONCLUSION
24

Food market drives the category

Top performing brand is Orbit Sugarless
Gum
Wrigleys Eclipse is a premium brand as
per price/unit
Price Reduction is most effective
promotional measure
The volume per unit has increased over
a period of time

25

Questions?

26

Thank You.
Divya
Sruthi
Kusum
Dinesh