Refresher course

Gum and mints go top of the class

In view of the fact that breath fresheners and gum take up extremely limited shelf space and deliver high turnover and high profits, it is no wonder that convenience and impulse outlets love the category so much.

Mints and gum are commonly bought by busy people who are out and about and on the go … in other words, your average convenience customer. Operators who manage the category effectively will find they attract customers who will also make other purchases while in store. It's a win, win situation.

As a whole, the category is currently valued at $70.7 million but breath fresheners and gum is approximately three times as big in grocery as it is in structured petrol and convenience (ie National P&C banners). This discrepancy is in part explained by the fact that grocery enjoys significant sales of higher value multipacks that aren't generally available in impulse.

While category as a whole is growing steadily, it is the recent innovations in gum that has really driven things. In particular, the emergence of the new 'lifestyle' gum segment, which includes Wrigley 5 and Mentos Aqua Kiss, has breathed new life into the category. The recent 5 gum launch was the most successful launch in confectionery in 2009. Launched in three initial flavours and with a fourth delivering incremental sales, it has grown the gum category.

In mints, brands like Mentos, Eclipse, Extra, Jila and Tic Tac have also performed strongly.

Tic Tac has been a C&I favourite for decades but its most recent sales success can be attributed to the launch of the new Citrus Twist flavour at the beginning of this year, as well as the continuing popularity of the Tic Tac Big Box range and the launch of Tic Tac Bold.

When talking about gum and mints however, it is Wrigley with its 78.3% share of the category through petrol and convenience, which is the largest player.

According to Wrigley's Customer Marketing Manager, David O'Brien, the secret to success is not really a secret at all.

The secret to success

"Our brands are successful because they are well supported, with targeted campaigns based on deep consumer understanding and insights," he said. "And they are of high quality with strong sensory appeal."

Wrigley's leading brands in gum are Extra, 5, Eclipse, PK, Juicy Fruit, Hubba Bubba and Airwaves, while it also boasts the Eclipse and Extra Professional brands in mints.

Wrigley's key brand, Extra, has a primary target of 18+, while Eclipse mints target consumers 25+.

"Both categories deliver against very different consumer need states and consumption occasions," said Mr O'Brien. "Eclipse delivers on powerful fresh breathening to make you feel good and ready for anything, while Extra helps consumers to take better care of their oral health."

He says that consumer choice is important as Wrigley's insights suggest that consumers have a portfolio of brands that they shop/consume based on their need. For example, consumers look for mint-based offerings to get the breath freshening benefit, and fruit flavoured offerings to satisfy a sweet craving.

It is clear that convenience consumers are generally impulse shoppers planning immediate consumption while grocery shoppers have a dual need – both stocking up, and for immediate consumption. For this reason, Wrigley, like the other manufacturers, has larger gum pack formats in supermarkets to accommodate planned purchases within the confectionery aisle. Single packs and Multipacks deliver on both need states.

The story is slightly different in convenience and impulse.

"As front of store placement is where shoppers expect to find the product, and also the fact that it is highly impulsive, it is imperative that this real estate is optimised with the appropriate ranges that satisfy all aspects of consumer need states," said Mr O'Brien. "These would include breath freshening, oral care, sweet cravings, and shared fun revitalisation."

Mr O'Brien continued: "As a convenience retailer, it is crucial that you make the most of the real estate at the counter with the right offering that is suited to the shopper need of 'need it now, want it now personal consumption. Gum and Mints is one of the key categories to service this need state for shoppers, and counter merchandising to maximise product visibility and encourage purchase is a key vehicle to achieving those impulse sales."

Wrigley works extensively on the development and execution of appropriate merchandising innovations that will enable a store to maximise its display and encourage purchase, which is a cornerstone of how to deliver growth in a highly impulsive category like gum and mints.

With its established product range, and following the successful launch of products such as Eclipse Cool Breeze Mints, 5 Tempest Gum, and Extra Bananaberry Gum in 2010, Wrigley continue to deliver strong innovation .

But Wrigley is not alone in its innovation. Stuart Alexander's launch of its two Mentos Aqua Kiss gum SKUs into P&C has been hugely successful, and the new Lemon/Cola and Strawberry/ Berry flavoured Mentos Bubble Gum will soon be on the market. This sugar-free bubble gum will come in a cardboard flip-top pack and, with strong promotional support, will bring new news to the bubble gum market.

Furthermore, Stuart Alexander has plans to further grow the Fisherman's Friend brand, which is already valued at $500k within convenience.

Packaging for portability & convenience

"Fisherman's Friend has launched an exciting new consumer friendly resealable pack, which will further improve the convenience and portability of Fisherman's Friend," said Paddy Bryans, Stuart Alexander's Category Manager, Confectionery. "This new packaging will 'Keep the "slap" in the Pack' – the famous Fisherwoman slap that is a metaphor for the invigorating impact of a Fisherman's Friend lozenge."

Encouragingly for Stuart Alexander, when this brand renovation was carried out overseas it helped to drive sales up by 14%. Hopes are high that it will have a similar effect here and the launch will be supported heavily with TV advertising, sampling, PR and high impact POS.

Mr Bryans believes the newly packaged product, which is traditionally targeted at older blue collar males, represents a great opportunity for convenience outlets.

"There is a strong opportunity to further increase distribution and volume sales within the impulse channel versus grocery, where more typically it is the female grocery buyer purchasing for the household," he said. "Outlets can target these blue collar workers more directly due to their frequent use of this impulse channel during the course of their work day."

Of course, it is critical that C&I outlets make the most of the marketing efforts put in by manufacturers but also that they implement in-store strategies if they are to drive the category on.

Innovations, promotions & combo offers

"It is important to try new things in C&I to maximise sales, as repeating the same strategies/promotions leads to a boring and repetitive offer for consumers," said Mr Bryans.

"The majority of P&C accounts are very open to trying new promotional mechanics."

Cross promotions or combo offers with complimentary categories can certainly help to drive sales. Overall, the most common purchases with confectionery in the petrol and convenience channel are beverages (42%) and fuel (41%).

Mr Bryans points to 7-eleven and Mobil as examples of groups that have been happy to trial gum and beverage combos ... a departure from the normal P&C combo of beverages and chocolate or hot food.

"We have trialled some combo promotions with beverages, which has rarely been done before with gum in the P&C trade and we feel that Aqua Kiss and beverage combos are a good fit for our teens and young adults target market, particularly with energy drinks and water brands," Mr Bryans said. "We have also had some good success with relatively shallow multi-buys on Mentos Aqua Kiss in major accounts."

He says these sorts of promotions drive volume for retailers, particularly as consumers in P&C are already very comfortable with buying two or more items in order to get a saving.

But it is not just about promotions. Accessibility is important for all products, but particularly for impulse products like gum and breath fresheners. "Typically when these types of products are put in front of shoppers they will buy them on impulse as they are easily consumed, highly popular and relatively low cost treats," said Mr Bryans. "It's especially important to help get your new lines noticed and induce trial."

Ferrero, the manufacturers of the Tic Tac brand couldn't agree more.

POS for instore visibility

"Only one in two shoppers plan to purchase pocket packs, therefore visibility in store is imperative," said. Elizabeth Elizabeth Kulukovski, Category Marketing Manager – Tic Tac.

"The trigger for purchase is primarily visibility via display or front counter/check-out."

Ferrero develops specific displays and point of sale (POS) merchandise that is tailored to the convenience channel.

"Our merchandising designs accommodate the space limitations in these stores and provide flexible stock-weight levels," said Ms Kulukovski. "Pre-packed units allow for ease of execution and minimal handling at store level and ensure that operators can display the full and successful Tic Tac flavours."

The leading Tic Tac products in the convenience channel are the Tic Tac 24g singles in Orange, Peppermint, Spearmint and the new Citrus Twist Flavour. Despite having been in the market for over 30 years the brand continues to demonstrate double digit value growth in the convenience channel ... more than 15% over the past 12 months.

"Ferrero envisages that the category will continue to perform well, especially in the convenience channel where retailers are tailored to securing the all important impulse purchase better than some other channels," said Ms Kulukovski. "Convenience, visibility in-store and a strong product offer focussed on the key brands and the top performing flavours will be the essential drivers to its continued growth in this channel."

She says that shoppers are always looking for something new to try, hence innovation and flavour refreshment will also be crucial in driving the category. Nonetheless, the top five brands still account for 62% of category value in convenience.

"It is extremely important to carry a variety of pocket packs and gums (mints & fruit variety) in a convenience store, however it should be limited to key brands and the top performing flavours only," Ms Kulukovski said. "The very nature of this category is that it is primarily an impulse category so therefore there is the possibility of a lost sale if the right offer or the right flavour is not visible or available."

Most C&I customers could be described as grab and go shoppers who don't want to spend time browsing the category to find what they want.

"Visibility at the front counter will continue to be imperative to securing the impulse sale," said Ms Kulukovski. "The front counter should focus on pocket packs and chewing gums equally, as there is very limited crossover between gum and pocket pack shoppers ... with only 9% of households purchasing both in the last 12 months."

In such a competitive and impulsive category, effective packaging is obviously also critical in helping brands to stand out from their competitors on shelf.

"Packaging in this category is focussed on portability and pocketability," said Ms Kulukovski. "Consumers also want something that is seen to be cool or trendy and this can be seen in the innovative packaging we can see across both the pocket pack and chewing gum categories."

Of course, few packages stand out as effectively as Tic Tac's iconic clear box which has maintained its modern feel and relevance since its launch in 1976.

There are always new innovations however and newcomers like Rio Mints believes its packaging will create a brand experience that will maximise usage occasions.

"The Rio product comes in a trendy tin with an ingenious slide locking mechanism for ease of use and portability," said Phil Clapham, Marketing Manager, Rio Mints. "The target market loves the fact that the mints can be dispensed singly and the fact that you do not end up with a handful of mints."

And, he says, the unique packaging makes Rio Mints a lifestyle accessory for socially active females. Rio Mints were launched in Australia with two variants: Sugar Free Honey Melon & Sugar Free Pink Grapefruit. To date they are only ranged with Caltex and Woolworths but the company hopes to further widen its distribution.

"Mints are generally purchased on impulse so stocking a variety of mints will ensure C&I outlets capture the impulse sales," said Mr Clapham. "They are high margin and a very small amount of counter space will generate greater profits."

He agrees that in such an impulse driven category, location on counter is critical and says that Rio's fruity offerings will give customers a broader range of mints that will attract non-mint users into the category, thus increasing the average customer spend.

"Rio Sugar Free has not cannibalised the category and is recruiting new users into the category," he said. "It has become quite clear that, due to the limited availability of the brand, Rio consumers are hunting for the product, so loyalists have been created and that is a great platform to increase the availability within the correct channels."

While breath fresheners and gum are in growth, Mr Clapham says this growth is driven by new products, funky packaging and the consumer's desire for greater convenience. It is critical, he says, that manufacturers continue to innovate in packaging, product and flavour refreshment.

As with all categories in convenience, breath fresheners and mints have got to continue to justify their place on the shelves and the emergence of energy shots represents yet another threat to the space allocated to it. Gum and mints ... and perhaps confectionery in general ... may need to expand beyond the traditional front counter in order to guard against a loss of presence.

As the category continues to innovate and to grow, visibility in-store will be ever more critical to securing the impulse purchase or reminding shoppers they are about to run out of product.

C&I operators seeking to maximise sales and profit in this area will also need to focus on stock availability and the optimal product mix; as well as promoting products as a multi-buy or cross promoting with complimentary categories.

When it comes to the breath fresheners and gum category then, there is always plenty for C&I operators to chew over.