Wm Wrigley Jr Company (US)

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The Wrigley name dominates the global chewing gum industry. Family-controlled for more than 100 years, Wrigley had established a leading position in just about every country in the world by the early 2000s, with market share that ranged from 60% in the US to 80% or more in some European territories. Its brands, which include Extra, Doublemint, Juicy Fruit and Hubba Bubba bubblegum, are sold in more than 140 countries around the world. However the group began to face intense competition from several rivals, not least Cadbury, which had begun to piece together its own global footprint in the sector. As a result, Wrigley expanded its interests into other confectionery sectors, including breath mints and more traditional sugar confectionery. The results of that strategy were mixed, however, and instead Wrigley agreed in 2008 to surrender its independence to chocolate giant Mars, also privately owned, for a whopping $23bn. The company now operates as a standalone unit of Mars with responsibility for its own products as well as the Mars portfolio of sugar confectionery brands, such as Skittles and Starburst.

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Adbrands Weekly Update 13th Oct 2016: Mars has taken full control of the Wrigley chewing gum business, buying out investment partner Berkshire Hathaway for an undisclosed sum. Mars teamed up in 2008 with billionaire Warren Buffett's investment vehicle to acquire Wrigley. Acting as financier to the deal, Berkshire contributed a total of $6.5bn to the purchase price. Around two-thirds of that sum was a loan to Mars, which has already been repaid. The remaining $2.1bn purchased a direct 20% stake in what then became a separate operating division combining Mars's sugar confectionery brands with Wrigley's gum brands. It has remained a separate legal entity from the main Mars business for the past eight years. Berkshire's preference shares in the business carried a guaranteed 5% annual return, which has netted that group around $840m to-date in dividends. The buyout allows Mars to consolidate Mars Wrigley with its main chocolate confectionery division. Current Mars Wrigley president Martin Radvan will lead the combined confectionery business, supported by Jean-Christophe Flatin as president of Mars Global Chocolate. Casey Keller, previously regional president of Wrigley Americas, becomes president of Global Wrigley.

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Brands

Juicy Fruit Orbit
Winterfresh Extra
Airwaves Hubba Bubba
Everest Altoids
5 Velamints

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Mars


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The modern history of chewing gum dates back to the mid-19th century (although it was reportedly the ancient Greeks who first invented the habit). American colonists had learnt from the Indians how to carve spruce resin from the trees and chew it as a relaxant. By 1850, spruce gum had been superseded by commercially manufactured sweetened paraffin wax. This in turn was replaced by chicle, a milky latex derived from sapodilla trees grown in central and south America. By the early 1900s, chicle chewing gums were big business, with around 16 different companies marketing their own brands.

William Wrigley Jr was the son of a soap manufacturer who set up in business in Chicago, selling his father's brand of Wrigley Scouring Soap to stores, and offering gifts on bulk orders. When one gift, baking powder, went down particularly well, Wrigley dropped the soap to concentrate on that instead. But the next premium gift he supplied - two packs of chewing gum for every can of baking powder - did even better. Wrigley changed track again, and in 1892 started marketing the gum under his own name, as Wrigley's Lotta and Vassar brands. The following year, he introduced two new flavoured brands, Juicy Fruit and Spearmint.

Wrigley worked hard to develop the business, travelling throughout the United States to visit retailers in person. Competition got even tougher when six rival chewing gum companies merged in 1899 to form the so-called "chewing gum trust", American Chicle (later part of Warner-Lambert). Wrigley retaliated by becoming one of the first American companies to use advertising to appeal directly to consumers. In 1906, Wrigley put a big push behind one of his slowest sellers, the Spearmint brand. A local campaign in three American cities was a huge success, so Wrigley rolled out the advertising into other areas, quickly establishing Spearmint Gum as America's leading brand. Doublemint was introduced in 1914, and eventually surpassed sales of Spearmint. In 1910, Wrigley took his first steps outside the US, opening a factory in Canada. This was followed by Australia (1915), Great Britain (1927) and New Zealand (1939). The company went public in 1923, and moved into the historic Wrigley building in Chicago the following year. Also in 1924, the family became the principal shareholders (until 1981) in the Chicago Cubs baseball team, which still plays at the Wrigley Field stadium. 

Philip K Wrigley, William's son, became president in 1925. He found that newer markets tended to prefer coated tablet chewing gums instead of the flat sticks sold back home. As a result, he introduced the PK pellet brand, named after his initials. During the Second World War, chewing gum became standard issue for US soldiers because it kept them alert and reduced tension. Because supplies of the gum base were limited, Wrigley suspended production of gum for civilians and channelled all its Spearmint, Juicy Fruit and Doublemint gum to the American army. Instead, the company launched an inferior brand for American consumers, while mounting an ad campaign featuring an empty Wrigley's wrapper, above the slogan "Remember This Wrapper". The advertising kept the brand in front of the public until 1946, when Wrigley's resumed domestic production. Following the war, the company began a global expansion strategy that led to factories in the Philippines, France, Kenya and Taiwan.

Wrigley acquired bubblegum maker Amurol Confections, makers of Hubba Bubba, in 1958. Philip Wrigley remained President of the company until 1961, when he handed control to his own son, William Jr. He introduced a number of new chewing gum brands in the 1970s, including non-sticky Freedent for denture-wearers and Big Red cinnamon gum. In 1984, the company launched Extra sugarfree gum, based on the PK design. In 1994, the company launched Winterfresh in the US. In 1996, Extra chewing gum for children was launched in Germany, with a rollout across Europe over the following two years. In 1998, Amurol launched Stay Alert, a bubblegum containing as much caffeine as two cups of coffee. 

Kraft's phenomenally successful relaunch of Altoids mints early in 1999 caused sales of chewing gums to plummet, especially in the US. Altoids' quirky advertising campaign was a major factor in pushing the gum market, already flat, into negative growth. All manufacturers were affected, but Wrigley was particularly hard-hit. Unlike competitors such as Warner Lambert, Wrigley had no mints in its portfolio. Instead the company reacted with the launch of new brand Eclipse. Produced in hard-coated tablets already tested in Europe, the gum had a similarly strong flavour to Altoids and other mints. By the end of the year, sales had recovered. The group launched a medicated gum brand Alpine in Canada to compete against traditional cough sweets. Also that year, William Jr died, just one day after appointing his son, the second William Wrigley Jr, as the company's new president. 

Following the experiment with Alpine, the group took a further step in this new direction in 2000, launching the Wrigley Healthcare Division to develop and market other gums that provide health benefits. The first US product, Surpass Antacid Gum, launched in 2001. Also that year the group announced a tie-up with Procter & Gamble to develop dental care chewing gums. Orbit, launched in Europe in the late 1990s, was also introduced into the US in 2001. Another key arena for the company was Russia. Chewing gum had been prohibited in Russia until 1980, when the government allowed the first imports to coincide with the Moscow Olympics. The product was seized upon by Russians as one of the few symbols of western lifestyle that almost anyone could afford. Wrigley began marketing in the country in 1991, setting up a local manufacturing base shortly afterwards. By 2000 Wrigley and Scandinavian rival Stimorol had become two of the country's biggest advertisers, spending more between them on advertising than even Pepsi and Coke.

In 2002 the group began testing new brand X.Cite in the UK, with the claim that the product, described as a cross between a mint and chewing gum. In the US it launched Eclipse Flash Strips, a new fresh breath mint strip, and later updated the packaging of its main products for the first time in many years. Shortly afterwards an adapted version of these Flash Strips began testing in the UK as Wrigley's Extra Thin Ice. However the most intriguing new development in Wrigley's corporate stance was an aggressive $12.5bn bid to acquire confectionery giant Hershey Foods. The approach came close to succeeding. But at the last hurdle the trust controlling Hershey decided to withdraw the business from sale as a result of outcry from Hershey's employees. Nevertheless it demonstrated a new side to CEO William Wrigley Jr. Previously the company had avoided making any acquisitions outside its core market. A $12bn bid for a chocolate maker marked quite a new corporate style. It was followed by two smaller purchases, of Spain's Joyco and of Kraft's sugar confectionery portfolio, including former nemesis Altoids.

In 2005, Wrigley faced increasing pressure from local government in the UK to contribute to the cost of cleaning up after chewing gum users. Local councils are estimated to spend around £150m a year attempting to remove dried, discarded chewing gum from streets and pavements. Bodies in London and Liverpool attempted to force Wrigley to add 1p to the price of packs to pay for this work.

Bill Wrigley passed the role of Wrigley CEO to non-family member Bill Perez in October 2006. Perez, previously CEO of SC Johnson and briefly Nike, was the first non-family member in Wrigley's history to become CEO. Upon news of the acquisition by Mars, it was announced that Wrigley's management team, including Wrigley himself, would remain in place. However, several senior leaders, including Perez, left the business quietly in 2009. See full profile for current activities


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