Gum giant Wrigley’s Q1 sales grew by 12%. The world’s largest chewing gum manufacturer also saw earnings rise by 9.3%. These gains underline the success of several newly launched products, which came despite a stagnant US gum market. Thanks to its strategy of innovation, Wrigley’s is sitting pretty while other packaged goods firms struggle with higher costs and few growth opportunities.
In a classic case of the rich getting richer, the Wm. Wrigley Jr. Company remains set on its path to even greater success and profitability. New product launches, including Extra Polar Ice and Eclipse, are helping to bolster profits and have fed into the company’s largest US quarterly sales gain in ten years and a 9.3% increase in profits.
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While there are significant opportunities for the chewing gum manufacturer overseas, particularly in developing countries, more than one-third of its business is US-based. Strongly entrenched competitive positions have precluded significant growth in this market in recent years, but Wrigley’s has bucked this trend with the launch of new products and more aggressive advertising campaigns. US earnings for Q1 were $81.5 million, up from $74.6 million a year earlier. Global sales grew almost 12% to $561.6 million from $503.3 million during the same period in 2000.
Many recent developments in the sector have focused on the social and cosmetic benefits of chewing gum. Products have broadened their scope from being simply tasty candies targeted at the youth market, to become products that promote a greater range of qualities and wider market appeal. There are now chewing gum brands that contain tooth whitening formulas, cough-suppressants and antacids. Wrigley’s has seized the initiative in these areas, releasing more pellet gum, cough-suppressant gum, teeth-whitening gum and, in February, Surpass antacid gum.
The overall trend in the consumer market space is towards combined product functionality, and gum is the perfect candidate for such applications. This trend appears to have development scope for the foreseeable future and, providing Wrigley’s continues to innovate and market effectively, the continued growth of the company seems secure.
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