Chewing Gum

SIC 2067

Industry report:

This industry consists of establishments primarily engaged in manufacturing chewing gum or chewing gum base.

Industry Snapshot

The American chewing gum industry has been marked by strong periods of growth and decline through the twentieth century. Since the 1970s, this industry grew at a faster pace overseas than in the United States. The industry's overall success was the result of low manufacturing costs and aggressive marketing campaigns.

As one of the best performers in the candy industry, chewing gum continues to be a favorite among U.S. consumers. Consumers, including adults, seniors, and children alike continue chewing various types of gum for a variety of reasons, thereby adding to the market demand in this industry. Innovations such as smoking-cessation gums and dental gums, which promise to clean or whiten teeth, entered the industry in the late 1990s. The National Confectioners Association reported in 2006 that 72 percent of the total gum market involved sugarless gum, with the remaining 28 percent for regular gum.

In the late 2000s, demand for regular gum fell while demand for sugarless gum brands increased. In fact, Information Resources, Inc., reported in May 2009 that sales for regular gum in the prior 52 weeks fell 10.9 percent, whereas sugarless gum sales increased 9.6 percent to $1.14 billion during the same time. The sugarless gum market posted strong results even as the global economic downturn showed no sign of waning, climbing 7.3 percent in 2009. In addition, chewing gum manufacturers introduced 114 new products, most of which were considered "Fresh-N-Fruity."

Organization and Structure

Chewing gum companies use two main channels of distribution: one through wholesalers, who supply retail stores in the areas they serve, and the other through the delivery of boxes of chewing gum directly to large retail outlets from the manufacturers' warehouses and factories. The retail distribution chain includes food, drug, variety and convenience stores, gas stations, newsstands, and restaurants. Another important channel for these manufacturers is distributors who stock vending machines.

Background and Development

History.
Though chewing gum bases are primarily synthetic in the 2000s, gum was originally derived from natural sources such as tree resins and saps. The use of chewing gum made from tree resin dates to ancient Greek and Mayan civilizations. In North America, Wampanoag Indians introduced chewing gum to European settlers that was made from the resin of spruce trees.

Americans began manufacturing gum in the mid-1800s, adding paraffin wax to make the gum softer and last longer. At about this time, flavors such as mint were added to the gum, helping to increase the product's popularity. In 1848, John Curtis of Maine started producing the first commercial spruce gum.

American settlers traveling west learned about chewing chicle, the hardened sap of sapodilla trees, from the Osage Indians. The sapodilla tree is found mainly in the tropical rain forests of the Yucatan Peninsula of Mexico and Guatemala. By 1869, the first commercial chicle was manufactured, and in 1906, paraffin was added to chicle.

During the late 1800s, companies that became industry leaders entered the business, making valuable contributions to the industry as a whole. William Wrigley, Jr., was a baking soda salesman who started offering two packages of chewing gum with each can of baking soda. When this promotion proved successful, Wrigley decided to enter the relatively undeveloped chewing gum business. His first two brands were Lotta and Vassar, and in 1893, he introduced Juicy Fruit and Wrigley's Spearmint. In the early days, Wrigley used premiums to encourage merchants to stock his chewing gum. The success of this marketing method led to a published catalog of premiums for retailers. Wrigley was also one of the pioneers in the use of advertising to promote brand-name merchandise. Advertisements for Wrigley's gum ran in newspapers and magazines and on outdoor posters. Even during industry slumps, Wrigley continued advertising.

By 1910, Wrigley's Spearmint gum was the largest selling chewing gum in the United States. Later that year, the company opened a factory in Canada. By 1927, Wrigley plants were built in Great Britain and Australia. Different preferences in international markets led to new types of products and flavors. Perhaps the most successful product for the company outside the United States was the pellet-shaped chewing gum sold under the PK brand.

Another industry leader, Franklin Channing, invented the first dental gum, Dentyne, in 1899. About the same time, Henry Fleer created Chiclets, the first candy-coated chewing gum.

Bubble gum was first developed in 1906, but early batches were too sticky to sell, and it was not until 1928 that bubble gum was first marketed. Another important development in this industry was the first sugarless gum, which was created in the late 1940s, but not marketed until the 1950s. LifeSavers' CareFree and American Chicle's Trident appeared in the mid-1960s and dominated the early sugarless gum market. In the 1980s, Wrigley's Extra gum was launched, and by 1990, it controlled 40 percent of the $480 million sugar-free gum market.

Sugar-free gums began using xylitol, an artificial sweetener, in the late 1970s. However, in 1978, the U.S. Food and Drug Administration (USDA) began investigating possible links between xylitol and cancer. Although no link was ever established, products made with xylitol were reformulated using other artificial sweeteners. In the early 1990s, xylitol was reintroduced by Leaf Specialty Products, which manufactured XyliFresh, a chewing gum intended for fighting plaque.

Chewing gum manufacturers have also enjoyed heightened success during times of war. The Wrigley Company recorded an increase in chewing gum demand during World Wars I and II and during the 1990-91 Persian Gulf War. In fact, during World War II, when top-grade ingredients were scarce, production was limited to the armed forces, and civilians were sold a lesser quality gum under the brand name Orbit.

Marketing and Product Trends.
Since it was first sold in the United States, gum has been packaged with novelties, such as sports cards, toys, and comic strips. In the twentieth century, companies launched novelty bubble gums, which were packaged in a variety of shapes and unusual forms, such as school lockers and toothpaste tubes.

In the early 1990s, sour gum became popular with children. These chewing gums have an extremely sour taste that becomes sweet and eventually has a neutral or tangy taste. Children often used these gums to play jokes on friends or to prove their mettle. In 1992, sour gum brought in an estimated $70 million in retail sales. Moreover, as the demand for sour gum caught suppliers by surprise, a "black market" for the product emerged.

In the 1980s, chewing gum sales were boosted by campaigns that promoted chewing gum as an alternative to smoking. Other advertisements have endorsed sugar-free gums as being good for teeth. In addition to advertisements on television, radio, and in newspapers, companies in this industry use sales representatives to market their products. These representatives regularly visit retailers and assist them with display designs and layouts.

In 1993, LifeSavers made industry news with its innovative approach to selling bubble gum. Its Bubble Yum product was promoted through a traveling virtual reality arcade game, and LifeSavers was the first company to use the game as a marketing tool. The game, called Planet Bubble Yum, featured chunks of bubble gum flying around in three-dimensional animation. Bubble Yum charged proof of purchase seals for admission. The tour traveled to shopping malls in major U.S. cities, with an average attendance of 1,100 people per location.

After a slump in the 1970s and early 1980s, chewing gum manufacturers entered the 1990s on a slight upswing. A new interest in chewing gum emerged in the United States when gum was promoted as an alternative to smoking in public places where smoking was increasingly prohibited. Domestic per capita consumption of chewing gum increased from 168 sticks in 1986 to 183 in 1992, resulting in a 1.3 percent average annual rise in gum sales.

Production.
The cost of producing chewing gum has always been low. High demand for chewing gum, allowing for high-volume production, and advances in automation have helped to reduce costs further. The price of ingredients, including corn syrup and gum base, also declined after the 1970s, thus reducing costs and increasing profit margins.

Modern methods and new materials have changed the character of chewing gum. Natural ingredients have become scarce due to changing climatic conditions, demand, and development in regions where the ingredients were harvested. Chicle and other products from trees are used in conjunction with synthetic materials. Most chewing gums are made with five basic ingredients: chewing gum base, sugar, corn syrup, softeners (such as glycerin and other vegetable oils), and flavors (mostly extracted from mint plants). In sugar-free gums, sugar and corn syrup are usually replaced with aspartame, mannitol, or sorbitol.

Manufacturers typically employ food chemists to inspect and test all ingredients and materials. The Wrigley Company maintains a central quality assurance laboratory where samples from each factory are tested regularly so that flavor and texture are consistent in their products throughout the world.

The growth rate of gum fell slightly in the late 1990s, and the $1 billion U.S. gum market showed little sign of growth. To blame were increasing sales of mints, including new intensely flavored mints. Mint sales skyrocketed by 40 percent in the second half of the decade. To combat declining sales, gum manufacturers introduced new, intensely flavored products. Wrigley launched a brand called Everest Powerful Mint Gum through subsidiary Amurol Confections Co. The strong mint gum was targeted toward adults hooked on strong mints. Wrigley also launched Eclipse gum in the summer of 1999, its first new product in five years. Eclipse, a mint gum, was marketed as a breath-deodorizing gum.

According to the U.S. Census Bureau's Current Industrial Reports, industry manufacturers had shipments of 399.6 million pounds of chewing gum, bubble gum, and chewing gum base in 2006, representing a nearly 5 percent increase from 2005. This comprised about 6 percent of the overall confectionery products industry. Further, the value of the 2006 shipments rose 8.5 percent from 2005 to nearly $1.8 billion in 2006. Manufacturing Confectioner reported in 2006 that dollar sales for gum were $1.1 billion in 2004, resulting in a 4.1 percent increase from 2005 in grocery, drug, and mass merchandising stores. Meanwhile, the U.S Census Bureau's Department of Commerce indicated that retail sales for gum equaled $2.7 billion in 2006 and wholesale sales totaled $1.8 billion during that time--an 8.3 percent rise from 2005. Information Resources, Inc., reported in February 2006 that the majority of gum sales in the prior 52 weeks had occurred in convenience stores (38 percent), followed by mass merchandisers (28 percent), food (supermarket) sales (24 percent), and drug stores (10 percent).

The top sugarless gum brands in 2006-07 per dollar sales, according to Information Resources Inc. and reported by Candy Industry, were Wrigley's Orbit ($185.3 million); Wrigley's Extra ($155.7 million); Trident ($114.2 million); Wrigley's Eclipse ($95 million); and Dentyne Ice ($74.1 million). Other types of gum gaining popularity included teeth-whitening gum, smoking-cessation gum, periodontal gum, and breath-refreshing gum.

In 2004, the National Confectioners Association (NCA) reported that 86 new gum products were introduced. During that time, sugarless gum continued to thrive with a 5.7 percent rise in purchases. Gum manufacturers continue to introduce new products, especially to cater to children, who are one of their biggest groups of consumers. Therefore, gum manufacturers spend considerable money and time researching new products that will appeal to this demographic. Packaging plays an important role in gum purchases. Innovative products like gum squeezed from a tube, a 3-D puzzle toy filled with bubble bits, and several feet of gum rolled up like ribbon offer consumers variety. Meanwhile, Wrigley focused on practicality with a package brought onto the market in 2006 for its Eclipse gum that was made for car cupholders. Increasingly popular are sour and intensely flavored gums. In the mid-2000s, more than 1,000 varieties of gum were both made and marketed in the United States, with some classics returning, including Beeman's and Black Jack.

To reach beyond the children's market, the industry has highlighted gum's healthful benefits. In particular, many adults are found to use gum as a means to lose weight to fend off hunger as a low-calorie alternative to snacking. In 2007, Wrigley's began a product tie-in with its Extra brand with the NBC television show "The Biggest Loser,' which featured 18 overweight contestants as they attempt to shed the most pounds. The company also sponsored a "Walk and Chew Gum Challenge" to promote weight control throughout the country.

Current Conditions

According to industry statistics, manufacturers had shipments of 3.6 billion pounds of sugar and non-sugar chewing gum in 2009. Although shipments increased, higher commodity prices were noticeable when shipment values totaled $1.7 billion. Industry consolidation was at the forefront of the gum industry in 2008; however, none stand out compared to the acquisition of Wm. Wrigley Jr. Co. by Mars. Traditionally, Mars, Nestle, and Cadbury fought for the first place position. With Wm. Wrigley Jr.'s more than $5.5 billion in annual sales and Mars' more than $10 billion in annual sales, the combined company had a 50 percent lead over its closest competitor.

One study conducted in April 2009 at the Pennington Biomedical Research Center in conjunction with Louisiana State University in Baton Rouge, Louisiana, with a grant provided from the Wrigley Science Institute, Louisiana, found that participants chewing "Extra" sugar-free gum for a three hour period in the afternoon craved snacks with a lower sugar content. While it has been proven that chewing sugarless gum cuts down on snack cravings, this study observed the "macronutrient composition" of the snacks most reached for.

Another study conducted at the University of Rhode Island in conjunction with the Wrigley Science Institute further validated that chewing sugarless gum can "reduce calorie intake and increase energy expenditure," reported in the November 2009 issue of ScienceDaily. Although this was considered a "short term study," it was good news for the chewing gum industry, especially when it comes to their share of the confectionery market.

Gum sales were robust despite the global weakened economic conditions. In fact, sales grew more than 10 percent between 2007 and 2010 with no slow down anticipated through 2014, according to Chicago-based research firm, Mintel.

Industry Leaders

Founded in 1891, the Wrigley Company of Chicago, or Wm. Wrigley Jr. Co., was the world's leading manufacturer of chewing gum. Wrigley sells its gum products in more than 140 countries. Its subsidiaries produce chewing gum base and manufacture novelty gums.

Other industry leaders included Cadbury Adams USA (a subsidiary of Cadbury Schweppes), Hershey (Bubble Yum and Ice Breakers), and Topps (Bazooka).

America and the World

Much of U.S.-produced chewing gum is sold overseas. Wrigley has operated in Europe since the 1910s. In the mid-1990s, Wrigley's business abroad rose over 10 percent annually, and during that time, the company opened a factory in China, where people already were introduced to chewing gum through shipments from Singapore. By 2006, the company was the leading gum and confectionery company in China with an average 18 percent rise in annual volume since 2000.

Formerly known as Warner-Lambert, Cadbury Adams USA also fared well in overseas markets. Its parent company, Cadbury Schweppes, was the dominant confectionery company worldwide. The company's markets included Canada, Europe, Asia, the Middle East, and Latin America. The company reported that emerging markets in its confectionery divisions demonstrated a growth of 12 percent in 2006.

Research and Technology

Companies in this industry continually seek ingredients and processes to improve product quality and packaging. In the 1980s, new synthetic gum bases were developed to overcome the limitations of previously used natural ingredients. These new materials were aimed at increasing gum flavor, improving texture, and reducing stickiness. In the 2000s, major gum manufacturers introduced their own respective versions of teeth-whitening gums in response to general consumer demand for whitening products.

The environmental impact of the packaging used for chewing gum is of considerable concern for companies in this industry. These companies rely on the wrappers and plastic packaging to keep gum fresh, yet these materials result in considerable waste. Scientists at gum companies evaluate and make changes to packaging and researching materials to meet future disposal and recycling requirements.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Chewing Gum

Bus Bosses' Plea over Litter as Chewing Gum Proves a Sticky Issue
Liverpool Echo (Liverpool, England); April 16, 2018; 532 words
...facts about bus cleaning: | Each bus is cleaned for at least 20 minutes daily on return to the depot. | Two pieces of chewing gum are removed from each Arriva bus in the North West every day. | The top five most common items to be leftr as litter...
Call for a Chewing Gum Tax as Council Faces a Sticky Situation
The Birmingham Post (England); March 15, 2018; 537 words
...com UK councils are calling for a chewing gum tax to cover the estimated PS60...It is not clear if any were for chewing gum. Standard street sweeping carts...environment spokesman, said: "Chewing gum is a plague on our pavements...
British Designer Turns Chewing Gum Waste into Recycled Products
Waste360 (Online); March 13, 2018; 380 words
...people to dispose of their old chewing gum. From the gum waste, Bullus is...Leicester, contains a minimum of 20% chewing gum. Amber Valley takes the mixture containing the old chewing gum then puts it into an injection...
Wipo Publishes Patent of Julius-Maximilians-Universitat Wurzburg for "Diagnostic Sensor and Chewing Gum Comprising Such a Diagnostic Sensor for the Taste-Based Detection of Viruses" (German Inventors)
US Fed News Service, Including US State News; March 26, 2018; 406 words
...22.Title of the invention: "DIAGNOSTIC SENSOR AND CHEWING GUM COMPRISING SUCH A DIAGNOSTIC SENSOR FOR THE TASTE-BASED...diagnostic sensor which can be worked into a diagnostic chewing gum that detects relevant concentrations of influenza viruses...
Recycle Chewing Gum?
Dayton Daily News (Dayton, OH); March 16, 2018; 315 words
What if somebody found a way to keep old chewing gum from turning streets and sidewalks all blighted, spotted and nasty? Well, somebody has. According to Fast Company, an inventor...
Wipo Publishes Patent of Roquette Freres for "Low-Sugar Chewing Gum" (French Inventors)
US Fed News Service, Including US State News; February 24, 2018; 338 words
...of the invention: "LOW-SUGAR CHEWING GUM."Applicants: ROQUETTE FRERES...invention is a low-sugar content chewing gum, more particularly, a low-sugar chewing gum or sweet. The invention further...
Supply of Chewing Gum
Mena Report; February 21, 2018; 288 words
Contract notice: Supply of Chewing gum Contract for the supply of chewing gum at fixed dates for the period from 1.7.2019 to 30.6.2022 with an option for a 12-month extension. this contract is divided into lots: No time limit for receipt...
Wipo Publishes Patent of Ecolab USA for "Methods and Cleaning Solutions for Removing Chewing Gum and Other Sticky Food Substances" (American Inventors)
US Fed News Service, Including US State News; January 28, 2018; 405 words
...invention: "METHODS AND CLEANING SOLUTIONS FOR REMOVING CHEWING GUM AND OTHER STICKY FOOD SUBSTANCES."Applicants: ECOLAB...Organization: "Cleaning compositions and methods for removing chewing gum, its components and other sticky soils from surfaces...

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