ISM 2014: Beneo urges gum owners to rethink marketing
Ingredients supplier Beneo has called on major bubble gum manufacturers to look again at how they market their products to try arrest falling sales in many Western markets.
Demand for gum in many developed economies like the UK and the US has waned. However, Beneo, the food ingredients arm of German sugar refiner Suedzucker, said the likes of Mars Inc have contributed to the decline in sales in markets in North America and Europe through putting restrictions on the kinds of advertising they use to promote gum.
The major brand owners, Beneo said, need to reassess how they market their products - and take advantage of new ingredients to help them drive bubble gum sales.
"Bubble gum is stagnating in most Western markets, or let's say the industrialised markets," Beneo marketing manager Thomas Schmidt told just-food at the ISM confectionery show in Cologne last week. "In our book, it's because the big manufacturers are neglecting this segment. They lack advertising power because of their self-imposed advertising restrictions towards younger people.
"That means they are neglecting a very important part of their future customer base. They do it deliberately - and I have a lot of respect for their decision - but on the other hand why don't they at least still make an effort to still have a product offering for that segment through the parents - through the adult purchase for kids? If kids are not used to eating gum, they will eat something else. They will grow into other snack items."
Schmidt said the use of an ingredient Beneo was promoting at ISM - Palatinose - could help owners of bubble gum brands develop and market products that parents would want to buy for their children. Schmidt claimed Palatinose, which he described as "a novel sugar", was "kind to teeth", non-laxative and a low-glycaemic sugar. He said Beneo had won EU approval for its claims Palatinose was "tooth-friendly" and had a "lower glycaemic response".
Successfully marketing bubble gum for children at adults could be a challenge even with such claims. However, Schmidt was confident the proposition could work. "I am totally convinced," he said. "I like the analogy of fat: if you think back 15, 20 years ago, fat was bad full stop. Now everyone knows there are good fats and bad fats and people have learnt to differntiate. People know olive oil is good for them. On the carbohydrate side, people will learn that as well, it takes time."
The company launched the ingredient six years ago and Schmidt said it was already used in "a number of beverage brands" including PepsiCo's Gatorade.
He conceded the ingredient had yet to be picked up in a significant way by the confectionery sector. Nonetheless, Schmidt said Palatinose offered an "opportunity" for gum manufacturers and claimed Beneo had received "pretty positive" feedback from confectioners.
However, he indicated Beneo knew it would take time to gain acceptance for the ingredient. "It has to fit their strategic plans. We are not expecting overnight success. This is a long-term thing for us."
Schmidt argued the major confectioners were still committed to the gum sector despite the recent pressure on sales.
"Absolutely. It's a very profitable product. Why did the Mars family and Warren Buffett spend US$22bn on a gum company? There must be a reason for this," he said. In a deal part-funded by Buffett's Berkshire Hathaway fund, Mars paid $23bn to buy Wrigley in 2008.
Sales to confectionery customers account for "roughly" a quarter of Beneo's sales, Schmidt said. "Gum is a good third of that quarter," he said. "Gum is really important to us, it's really an important part of the business, mainly through the sugar replacer Isomalt that is used in pellet gum coatings. It's something we really want to keep alive and we strongly believe that the segment could be revived."
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