See the twenty-somethings on their way out to clubs at night
See the twenty-somethings on their way out to clubs at night; many duck into the convenience store first if they don't already have mint-flavored gum or breath freshener on hand. Some adults wrestle everyday to control snack cravings and save money by using this category as a substitute. Still others simply enjoy the taste and sensory pleasure of these items.
Gums and breath fresheners exist outside of today's nutritional discussions, where thousands of other items seek status. Yes, there are gum-based products with medical applications such as smoking cessation, but sales trends reported in this story relate to the feel-more-confident aspect of gums and breath fresheners, which once bought pop up seemingly everywhere - in desk drawers, car consoles, jacket pockets - within easy reach for when social opportunities might arise.
This translates well to retail sales. Successive dollar sales gains for gum came the past two years at a time when many center-store categories flattened or declined. Chewers wouldn't be denied: their demand drove a 6.7% jump in the 12 months ended last summer, and a 1.4% rise to $1.85 billion in the latest 12 months ended August 7, 2010, reported Nielsen. All data represent sales of prepackaged, UPC-coded products only in U.S. food, drug and mass merchandiser stores (including Walmart).
A good part of these gains came from price rises, since equivalized unit volume (EUV) rose just 2.6% in the prior year and stayed flat in the latest year, the Nielsen data showed. It looks as if retailers narrowed the pricing gap between private label and name brands during this two-year stretch - apparently feeling they wouldn't capture more than nominal market share anyway, so they might as well capture incremental margin dollars.
Here's the contrast: Branded gum accounts for all category sales except for $6.7 million rung up by private label. While branded gum dollar sales rose 6.7% (on a 2.7% EUV rise) a year ago and 1.4% (on flat EUV) in the latest year, more dramatically the private label dollar sales fell 4.7% (on a 7.3% EUV drop) a year ago and rebounded to rise 14.3% (on a 3.5% EUV slide) in the latest year, according to Nielsen. EUV is measured on a 100-stick basis.
By a wide margin, sugar-free chewing gum posted the best performance of all segments. After growing dollar sales 9.4% a year ago, it rose 3.7% to $1.56 billion in the latest year. By contrast, regular chewing gum, and regular and sugar-free bubble gum, all showed significant percentage losses in the latest 12 months.
Meanwhile, dollar sales of breath fresheners rebounded strongly in the most recent 12-month period. Following a 14.2% fall in the prior year, the segment clawed back with an 8.3% climb to $8.3 million. The EUV performance (ounce basis) was far more volatile: EUV plummeted 51.4% in the prior year and soared 49.9% in the latest period, Nielsen reported.