January 1, 2006
It’s often still in search of a home within the store, but functional gum is oh-so-much more than merely a fad.
Functional Gum Category Estimated U.S. Retail Market Size
Source: Confectioner estimate based on input from industry players
Want to focus your attention for a study session? Looking for an energy boost? How about a secret weapon in a weight-loss program? Welcome to the brave new world of functional chewing gum.
Gum is an optimal delivery vehicle for functional ingredients — vitamins, minerals, botanical compounds and even caffeine — which has made it a flourishing segment of the functional foods market, a category with overall retail sales of $19 billion in 2004, according to the research firm Datamonitor.
Energy gums represent one of the best opportunities in the marketplace right now, with tremendous growth potential. Beyond that, products positioned to support diet regimens may be the next big thing for a couple of reasons. No. 1, research has shown that consumers already chew gum as an appetite suppressant. Secondly, the emergence of products formulated with ingredients like chromium picolinate and l-carnitine deliver metabolism-boosting, appetite-curbing benefits that have been scientifically documented.
It’s true that the ingredients used to formulate functional products add to product cost, but retail pricing still needs to stay in the range of 20 percent to 30 percent above mainstream gums in order to encourage trial. Consumers are taking a risk when they try something new; don’t discourage them with “insult” pricing!
As the category becomes better established, the potential for upping the profit margin will be there. Consider the fact that while soft drink prices hover at just a bit over $1, Red Bull Energy drink sells for more than $2.
The challenge here is that many retailers aren’t sure where to position functional gums in the store. One thing that category experts agree about: This gum shouldn’t just be dropped into the middle of the existing gum set with the hope that consumers will stumble across it. And the slower-traffic HBA aisle certainly isn’t optimal for stimulating impulse purchases.
Watch for the functional gum category to grow strongly until it’s no longer a niche business, but something that mainstream vendors have embraced. Support for such forecasts can be found in the functional beverage category, where fortified beverages now represent a significant share of convenience store cooler vault sales.
Make a statement. If you want a functional gum product to take off, don’t bury it in with the regular gum. This is an emerging category, and consumers need to find new products easily through prime positioning and eye-catching point-of-purchase materials. So consider placing it in locations such as across the top of the gum and mints section or use a countertop display or clip-strip at the front end.