London, Jan 31 - Britain's Cadbury Schweppes Plc is locking horns this week with chewing gum giant Wm Wrigley Jr Co as it launches major new products to try and break Wrigley's near-monopoly of the British gum market.
Cadbury, the world's biggest confectionery group, is spending 10 million pounds ($19.7 million) this year to launch Trident gum to revive a depressed British gum market and take some of Wrigley's 98.4 percent share of the national market.
The move comes as chewing gums are leading the growth in many confectionery markets around the world with consumers attracted by the healthy image of sugar-free teeth-whitening gums as an alternative to sugar-rich chocolates and candies.
"The UK gum market needs a revolution as the market has declined 4 percent a year over the last two years," Simon Baldry, managing director of Cadbury's businesses in Britain and Ireland, told Reuters in an interview on Wednesday.
He is aiming to use Cadbury's lead in the British chocolate and sugar confectionery markets to make it a "sizeable player" in the 239 million pound annual British market with its Trident juice-centred and long-lasting taste gums.
"Wrigley is responsible for the British market not growing, and there is a need for new types of innovative products in the market," said Baldry, who is spearheading the British launch of Trident which Cadbury bought in its Adams purchase in 2003.
He argues that other developed markets like the United States grew its chewing gum market by 8 percent last year, within a global gum market worth around 10 billion pounds, and so the British market has lagged significantly behind.
CADBURY DISRIBUTION STRONG
Analysts warn it may take Cadbury time to make money from the British gum market, but with its strong distribution network and sales force it stands the best chance of success against the dominance in Britain of Wrigley.
Wrigley, which has sold gum in Britain for 96 years and has had a manufacturing base here since 1926, says competition is healthy for the gum category and has launched new products to add to its Wrigley's Extra, Orbit and Juicy Fruit brands.
"We think that competition is healthy for Wrigley, it sharpens our edge and fuels our drive to win," said Gharry Eccles, managing director of Wrigley UK and Ireland.
Earlier this month, Wrigley launched a number of new products ahead of Cadbury's move, such as Extra Ice with a liquid burst and Orbit Complete which will see a "significant" marketing spent behind them.
Wrigley says gum has been the big growth area in British confectionery and although the market has not grown recently it has grown 47 percent over the last 8 years.
But Baldry is still confident Trident, the world's fastest growing gum and No 2 globally to Wrigley's Extra, will succeed.
"We are used to competing against the likes of Mars and Nestle , and we are comfortable in our battle with Wrigley. We are convinced Wrigley will respond in all sorts of ways, but we have a great set of products and in the end the consumer will decide," Baldry said.
Wrigley products have focused on freshness and teeth cleaning properties while Baldry says Cadbury will aim to give pleasure to the consumer as well as function.
Cadbury is using its top gum brand Trident, which grew worldwide sales 20 percent annually in the four years up to 2005, and by 31 percent so far in 2006, and it is aiming at the premium gum area rather than fight on price with Wrigley.
Its juicy-centred gum Trident Splash and long-lasting flavour soft gum Trident Soft went on sale in Britain on January 29 while an advertising campaign starts up on February 12.
Splash with 9-gum pieces retails at 50 pence and its 14-piece pack of Soft at 69p against Wrigley products which sell largely around the 30-40p per park mark.
Cadbury bought Adams in the U.S. for $4.2 million in 2003 pushing it into No 1 spot in confectionery worldwide with an increased focus on North and Latin America, and No 2 position behind Wrigley in gums with a host of leading brands such as Trident, Dentyne and Bubblicious.
Cadbury is looking for a boost in 2007 after a British salmonella-related chocolate bar recall last year will see overall flat profit margins 2006, the group has said.