News

Jay Klein has a lot to chew on these days.

His company has developed gum that promises to deliver a hefty dose of antioxidants to all those who chomp on it, and although he's won over some large retailers, he's concerned that consumers will stick with their traditional brands rather than try something new.

"As a startup with limited resources, it's a chicken-and-egg scenario," says Mr. Klein, president of Toronto-based Bonus Gum. "We have spent our time convincing retailers to give it a shot, but you still have to convince consumers, and move the gum off the shelves."

Mr. Klein, who has a background in marketing and advertising, decided last year that he wanted to get in on a trend that has seen manufacturers imbue food and beverages with vitamins. He read a lot about the health benefits of antioxidants - molecules that slow the deterioration of cells in the human body and are believed to strengthen the immune system - and decided they would pair well with a stick of gum.

"Nobody has gotten into adding more nutritional value into gum," Mr. Klein says.

After working with his Denmark-based manufacturer, Mr. Klein decided on two gum varieties: cranberry and green tea. Both products are considered excellent sources of antioxidants and, according to Mr. Klein, one piece of Bonus's mint-flavoured green tea gum has the same health benefits as two mugs of green tea.

He started approaching retailers late last year, and made his first delivery in February. Canadian consumers will soon find Bonus gum on the shelves of Wal-Mart and Petro-Canada stores, among others, while smaller U.S. chains have also expressed interest.

There is some good news for Mr. Klein: The global gum industry is worth an estimated $19.5-billion annually.

And some bad news: The market is dominated by Wm. Wrigley Jr. Co. of Chicago and Cadbury PLC of Britain, which together control about 65 per cent of chewing gum sales.

All things considered, Mr. Klein doesn't know whether to direct his marketing efforts toward the stores that stock his gum or the customers who will decide whether they want to chew it.

"Retailers are putting it on the shelves, but we still have to move it," he says. "The challenge we are seeing is that some consumers are reluctant to take risks."

What our experts say

As owner of Candy Aisle for the past 10 years - with two stores in British Columbia and a busy website - Jason McCann has a feel for consumers' tastes in gum that larger retailers might lack.

"I must fully believe in a product before I'll put it on my shelves," says Mr. McCann, who says his stores sell more than 100 gum varieties. "My customers buy things they recognize, but we have a good name so if we recommend something, they'll try it."

Without a big marketing effort, he adds, it could be hard for Bonus Gum to convince consumers they want another brand of gum. But he says specialty stores like the Candy Aisle are a great way to get a new product off the ground because, if the owner becomes a fan, word of mouth can help to build a loyal client base.

Kenneth Wong, a marketing professor at Queen's University in Kingston, Ont., who specializes in business strategy, says that large chains may not be the best places for Bonus founder Jay Klein to introduce his product. While a Wal-Mart or Petro-Canada location might look good on paper, shoppers in these stores usually aren't looking for new, trendy items. "He might have more luck selling at a premium price in places such as bubble tea stores, juice bars or oxygen bars than trying to land convenience stores."

The owner of Candy Aisle says the thought of selling antioxidant-laden gum to his customers doesn't particularly appeal to him. People may be concerned about their health when they buy a bottle of water or a packet of vitamins, but gum is about fun, he says.

What they are concerned about is taste, he adds. Many flavours have come and gone from his store, but over the years, customers have shown a fondness for such flavours as licorice, cola, root beer, bubble mint and watermelon. The problem is that many of the companies that make these brands are small and poorly financed, and go out of business just as customers are starting to buy their products.

After taste, price becomes important for any new food product trying to gain market share. Customers may be willing to spend the same amount of money for an antioxidant gum as they would on their regular gum, but Mr. McCann says they're not likely to pay more. Bonus's basic mint gum retails for between 99 cents and $1.09, but the antioxidant and energy brands cost between $1.49 and $1.59.

University of British Columbia marketing professor Darren Dahl says if Bonus founder Jay Klein aims to compete with global giants, he must appeal to customers looking to break out of the pack.

"He needs to really identify and home in on his unique selling proposition," Mr. Dahl says. "He's created something different than Wrigley's, and maybe it is truly unique enough to get people buying. But if it's really successful, it would be knocked off shortly."

This is where the branding comes in, Mr. Dahl says. Jones Soda competes with Pepsi-Cola and Coca-Cola, but peacefully co-exists on the shelves with the cola behemoths helped by offbeat marketing and unexpected flavours. "They've managed to make their name on being a unique brand, rather than on the taste of their pop," Mr. Dahl says. "They have pictures on their labels, and they do crazy promotions ... they've carved out a niche that is very independent from Pepsi and Coke."

Mr. Klein must watch he doesn't outsmart himself with marketing efforts, however. To help sell his mint gum in the United States, he repackaged it as "election gum," with Republican and Democrat labels. That won some media coverage but might leave no lasting impression as customers move on to the next most interesting thing, Mr. Dahl warns.

He says if antioxidant gum is what makes Bonus different, Mr. Klein might best direct his marketing efforts in that direction. "If he's too far back on the wave, time will tell. If he can show it has those characteristics, maybe he can make it the gum people choose."

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In a nutshell

Know your customers

Big chains may order a lot of product, but small retailers are more likely to be successful in selling the product.

Differentiate

If antioxidant gum proves popular, the big players will rip off the idea. Set yourself apart by creating an underdog brand that customers appreciate.

Go for taste

Mint is fine, but customers have shown a fondness for offbeat flavours such as cola and licorice.

Keep it real

Don't get sucked into guerrilla marketing campaigns that get an immediate pop but do nothing to build the brand.