NEW YORK — Four factors may explain the deflation of the $4 billion U.S. gum market, which declined by 10% in sales and 20% in volume over the past five years, according to a new report from Rabobank.
First, a drop in popularity among young adults and teenagers, historically frequent chewers, has contributed to suffering sales, Rabobank said. A slow recovery in youth employment and a cultural shift away from chewing gum and similar habits may be to blame.
Second, growing consumer preferences for clean labels and ingredients perceived as natural has challenged brands that use particularly controversial artificial flavors and sweeteners. Sugar-free gum volumes turned negative in 2011 and have dropped faster than sugared gum sales since, suggesting a move away from aspartame and similar ingredients.
Third, too much innovation and too many launches are overwhelming consumers, Rabobank said. An excessive number of stock-keeping units in the category, product premiumization that has led to higher prices, and such high-profile missteps as Wrigley’s caffeinated gum that was pulled by the Food and Drug Administration over safety concerns, may have complicated the category.
The fourth and final driver of lower gum sales may be rapid growth in mint consumption. The U.S. mints market has climbed by a 4% compound annual growth rate since 2008 to reach $1.2 billion in 2013, with standard mints up 15% and power mints, which are described as stronger-tasting breath fresheners, growing 27%. The latter grew 6.4% in 2013 alone.
Mint products typically contain more servings than gum products and benefit from such advantages as discreet consumption and no-to-low waste.
“The gum industry has become unstuck and will need to sink its teeth into some solid marketing ideas in order to reinflate sales,” said Nicholas Fereday, senior analyst for Rabobank. “Savvy mint companies have packed fresh breath, oral hygiene and low calories into their marketing mix, and trumped gum on convenience and value. If current trends continue, we may become a nation of suckers.”
Gum makers should consider using such natural sweeteners as stevia, xylitol and erythritol and natural gums like chicle while eliminating artificial ingredients when formulating products, Rabobank suggested. Additionally, products that proclaim benefits of oral health and hygiene, with specific messaging around saliva production, tooth decay prevention, stress release and improved focus, may resonate with older consumers, while marketing the fun aspects of chewing gum, especially bubble gum, may entice the youth market.Finally, Rabobank said, gum positioned as a post-snack, low-calorie breath freshener stands to succeed in today’s snack-heavy culture.