Bill Frazer, vice president-U.S. grocery for Wrigley, says that effective merchandising allows shoppers to make quick and easy decisions in the gum and mint segments.
GHQ: Tell us the state of the gum and mint markets. What is driving sales?
Bill Frazer: It is no secret that 2012 was a soft year for gum sales, but a solid year for mints. Shifts in consumer shopping behavior, in part due to the weakened economy, combined with a year of relatively light innovation, have challenged the sales climate for gum within the grocery channel. Moving forward, we are extremely focused on restoring the gum segment to health. To drive sales and long-term growth, we are concentrating on four insights: accessibility, innovation, an enhanced shopping experience and in-store execution.
What do retailers need to do to maximize sales?
Within the grocery channel, effective merchandising allows for quick and easy shopper decisions in these high impulse segments. With multiple options at the front-end and in the confectionery aisle, it is essential to use category management best practices to optimize brand, flavor, size and pack solutions—and then shelve them in the best locations.
Specifically, retailers can maximize shelving via the shopper decision tree model. This ensures that “power brands” are highly visible, and allows assortment to be driven by sales performance. Additionally, our retail partners can leverage confectionery impulsivity by adding secondary displays in departments like deli, pharmacy, customer service and liquor.
Talk about how merchandising and marketing work with self-checkout merchandising. What needs to be done here?
If a grocery retailer has self-checkout (SCO) units in its stores, research indicates that 30% to 40% of all transactions are going through these lanes. Unfortunately for many retailers, these SCO lanes are completely void of merchandising solutions on high impulse categories like confectionery and beverages. In order to better understand this opportunity, Wrigley has recently completed one of the most comprehensive research studies in the area of SCO. Our research identified that the needs and expectations of SCO shoppers are slightly different than shoppers that move through traditional cashiered lanes. For products to sell at SCO, they must have high impulsivity and high “quick grab” properties, like beverages and confectionery.
What is Wrigley introducing and promoting at this point?
In order to grow the gum category in 2013 and beyond, we have got to get the basics right. While innovation is a key growth strategy for our business, it is not the only solution. We are proud to produce many well-loved products, and recognize it is crucial to bring pack and price options to market so that consumers can always have gum on-hand.
For example, our Orbit and 5 gum Micro Packs, pre-priced at 69 cents, are an ideal impulse purchase at the front-end. In December we launched Micro Pack Grab & Go Packs, which are bulk packs that are perfect for the pantry and sharing with others. Additionally, we expanded our popular bottle packs to offer new sizes—larger Car Cups and smaller On the Go bottles—which help provide variety in size and price, ensuring we are providing something for everyone.
We are confident in the category’s ability to turn-around; to us, long-term growth means that people think of gum as a part of their daily routine. If we achieve this, we bring the category new relevance and increased momentum for future growth opportunities.