🍬Chewing on Success: What Wrigley's Gum Can Teach Today's Startup Founders
From a stick of gum to a billion-dollar brand. Wrigley's is proof that innovation and persistence pay off!
How many times have you picked up chewing gum while you were in the queue at the billing counter? Lost count? Haha, same.
The global chewing gum industry was worth $25.8 billion in 2021. And today we are going to talk about Wrigley’s, a company that has owned 25% of this market since 2015.
Eh? 25% of the market, but can’t recall having any gum from Wrigley?
Think again: Boomer, Orbit, Doublemint, and Skittles are all Wrigley products. Even Snickers, M&M, and Twix come from the stables of Wrigley’s parent company, Mars.
Their array of brands has become household names.
Over a century, the brand has survived wars, recessions and whatnot. And its story holds an important lesson for a lot of new-age startup founders.
Grab a Snickers and ReadOn…
🔍 The Bitter-Sweet Story of Wrigley
Back in 1891, William Wrigley Jr. started a soap business. To lure customers to the not-so-attractive soaps, he started giving baking soda as a free side product.
Ironically, baking soda became more popular than soap!
Hitting a mauke pe chauka, Wrigley also started selling baking soda. And to complement these two products, he started giving out chewing gum as a freebie.
As luck would have it, his free chewing gums became more popular. So he shut shop for soaps and baking soda, and launched his own chewing gum in the flavours of Spearmint and Juicy Fruit. (Talk about side-kicks taking over the show :P)
This careful observation of market trends and quick changes in strategy made Wrigley’s a global leader. A brand that truly survived the test of times.
The first challenge that Wrigley’s faced was the 1907 Bankers’ Panic. This was the time when the NYSE fell by almost 50% and the entire USA was in a state of havoc. Quite naturally, the demand for impulsive products went down, and gum was one of them.
Companies began adopting cost-cutting measures to cope with the crisis. And of course, the luxurious advertising expenses are the easiest ones to scratch from the list. This led to a fall in the demand and prices of advertisement spaces.
Now, Wrigley’s had a different approach. Instead of panicking like the others, he took advantage of the lower ad spaces, mortgaged everything he had, and purchased $250,000 worth of advertising. Absolutely crazy, no?
Well, the trick worked, as sales surged up from $1,70,000 to $3 million in 3 years! (Still wanna call advertising an expense and not an investment?)
This was his expansion period. He spread to Canada, Australia, Britain; took over companies, and even introduced Doublemint.
But, dilli abhi bhi dur thi.
To transform gum from an impulsive product to a habitual product, something revolutionary had to be done. Wrigley’s needed to show how their product could do good in people's day-to-day lives. And that’s exactly what Wrigley’s did.
They started citing the product’s health benefits and completely changed the product perception. Wrigley’s broadcasted chewing gum as an after-meal product that helps in cleaning the mouth, thus encouraging everyone to buy it by the box.
Once this healthy message was sent across, came his masterstroke. Freebies again.
He believed that those who could afford a telephone could afford chewing gum. So, he sent a pack of Wrigley’s to every home in the US telephone directory (a whopping 1.5 million homes!) along with extras on children’s birthdays!
As more people tasted it, sales rose. A pure volume game, keeping prices reasonable.
With the thunderous success and popularity, Wrigley’s went public in 1919. But the strategies didn’t stop. Wrigley’s tried everything. He broadcasted sports and took over a team, spending massive amounts, all leading to growth.
Man with a mission. Man with a passion.
He did not stop there. He even linked chewing gum to war! The case he made was that his product helps delay thirst. And just like that, gum became essential for all soldiers protecting their country.
However, the company that shone through the crisis of 1907, survived wars, was sold off to Mars in the financial crisis of 2008.
Warren Buffett famously said,
“I don't know what oil or wheat or soybeans or cocoa or anything like that's going to be selling for next week or next month or next year. I do know people are going to be chewing Wrigley’s gum and eating Mars bars.”
And, rightly so. Wrigley’s continues to shine under Mars. And Warren Buffett more than doubled the money that he invested in Wrigley’s.
Never knew that a pack of chewing gum could wrap so much history, heritage and lessons, no?
ReadOn Insight: Wrigley’s innovative approach, his quick thinking and his willingness to pivot and pivot fast can teach founders a lot. Identifying your star product and using the right marketing strategy can take your business to the next level!
What other brands do you think Indian startups can take lessons from?
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So it means chewing gum as a fashion was largely popularised by Wrigley? Also, are the health benefits true or just a gimmick?