Prepared Foods November 14, 2005 e-newsletter

Wm. Wrigley Jr. Co. is placing greater emphasis than ever before on churning out new products. In January 2006, the Chicago-based company will release eight new flavors to the chewing and chomping public. The move follows the roll-out of seven new items in June, then the biggest expansion over any comparable period in the company's 114-year history.

Before Bill Wrigley became chief executive in 1999, new products typically made up about 5% of annual sales, spokesman Chris Perille said. Now, they constitute 20% of sales.

The new products due Jan. 1 include Doublemint mints; a new flavor of Extra gum called "Cool Watermelon”; two new flavors of Eclipse gum, "cinnamon inferno" and "midnight cool”; a new flavor of Orbit White gum called "Wintermint”; one new flavor each of Creme Savers and Lifesaver Gummies; and a new flavor of Altoid mints, mango sour.

Most of the new products represent extensions of existing brands. Some -- Creme Savers and Altoids, for example -- arise from brands Wrigley purchased in its landmark $1.48 billion acquisition from Kraft Foods in late 2004.

The increased flow of new items to the candy rack signifies a change in tactics for Wrigley. Representing the fourth generation of family leadership at the company, Wrigley has adopted an aggressive growth strategy. In part, he has pushed for growth through acquisitions, trying unsuccessfully to buy Hershey in 2002. Then came the Kraft deal.

Wrigley also has put product development into overdrive. Last month, the company opened a $45 million "Global Innovation Center" on Goose Island, where Wrigley scientists and food technicians will work on new products and conduct focus groups.

The expansions make economic sense, said Bob Goldin, an analyst with the Chicago-based food consulting firm Technomic Inc. With a pack of Juicy Fruit or Doublemint, containing five sticks, still selling for $0.30, products such as Eclipse and Orbit are more profitable. A pack of Orbit White, with 12 "pellets," sells for $1.49, and a 12-pack of Eclipse sells for $1.39.

"They realize that with the success they have had in pellet gums and sugar-frees, there is a huge opportunity to margin up," Goldin said.

In addition, Wrigley's competitors are scrambling to put new products in the marketplace. Hershey, for example, recently introduced Ice Breakers Liquid Ice Mints and has extended the brand with new flavors. Cadbury Adams, Wrigley's main global rival, is extending its popular Dentyne Ice line.

Source: Chicago Sun-Times