The North American chewing gum market is stagnating, but it's not a phenomenon that extends to the rest of the world.
The moribund state of the chewing gum market was underlined this week when Wrigley Canada, one of the two major gum makers in the country, announced plans to close its Toronto manufacturing plant next year. A decline in sales has forced the company to reorganize its operations, and production will be shifted to a Georgia plant, said Wrigley, a subsidiary of Mars Inc.
Chewing gum sales in Canada declined by 2 per cent for the third year in a row in 2014, according to Euromonitor International Ltd., a London-based market research firm that closely follows the chewing gum market.
It also projects that gum sales will continue dropping in this country at about 1 per cent a year for the next half decade. About $500-million worth of gum is sold annually in Canada.
In the United States, the decline is even sharper. Gum sales fell by about 2 per cent in 2014 to $3.5-billion (U.S.), Euromonitor said. And gum sales are expected to drop another 11 per cent over the next five years.
What's the cause? Euromonitor has many theories, ranging from a shift to "power mint" breath fresheners, growing concern over disposal of used gum and the wide range of alternatives for young people to spend their money on. Others suggest the decline in smoking might be a factor, since fewer people are using gum to try to cover up smoker's breath.
Euromonitor senior analyst Jared Koerten said the issue is mainly demographic. "That millennial generation hasn't really picked up gum as much as previous generations." They see it as unprofessional to chew gum in the workplace, he said, and over all, "their general snacking habits are very different."
The one subsegment that is a bit stronger than the overall category is sugar-free gum, which is expected to show modest growth in both Canada and the United States over the next few years.
However, the North American slide in gum sales is not being duplicated in many other parts of the world, especially in developing countries. The worldwide chewing gum market grew by about 20 per cent between 2009 and 2014, the Euromonitor figures show, reaching about $24.7-billion last year. And it is projected to grow another 32 per cent to $32.5-billion over the next five years.
In China, the gum market grew 10 per cent between 2013 and 2014 alone, and is expected to continue to expand by 6 per cent a year for the next five years. Brazil, Russia and Mexico are also showing solid growth.
The opposing trends in gum consumption in North America versus developing markets is likely owing to cultural differences, said Darren Dahl, a marketing professor at the University of British Columbia's Sauder School of Business. Gum is a very mature product in the United States and Canada, he said. Elsewhere, "it is gaining momentum culturally," he said. For consumers in those countries, it has appeal because it is seen as "North American and different."
It is a classic situation where a product is in a different part of its life cycle in different parts of the world, Prof. Dahl said. "Life cycles vary across geographic regions. … The life cycle here is in its maturity stage, while in other geographic markets, it is in much more of a growth stage."
In Canada and the United States, gum used to be ubiquitous and part of everyday life, but that is slowly changing, he noted. "When I was young, we lived on that stuff," while now the "social norm" is shifting – not dramatically, but enough for the market in North America to be stagnating, he said.
While mainstream chewing gum products may be losing their grasp on consumers, some niche markets are booming. Toronto-based Pur Gum, which makes gum with a natural non-sugar sweetener and no chemicals, has seen "tremendous growth in our category," founder Jay Klein said. The product, which is vegan as well as nut- and gluten-free, is particularly appealing to consumers who want to avoid chemical sweeteners, or people who have dietary sensitivities, he said.
Specialty gums are expanding quickly because they are starting from a small base, Mr. Klein said, even if the overall gum market is stagnating. A big gum promoter, he insists that chewing gum "increases focus, stimulates the mind, and it is good for the mouth in terms of oral care benefits."
Pur had a big breakthrough a year ago when it managed to get giant food retailer Loblaw Cos. Ltd. to carry the product. Mr. Klein said specialty and health foods – including his gum – are the only categories generating any significant growth in the grocery market.
Euromonitor's Mr. Koerten said some niche products in the gum market will do very well "if they can hit on a consumer trend and innovate a bit."