Wrigley challenges confectionery giants

By Peter Stiff

- Last updated on GMT

Related tags Kraft foods Confectionery Cadbury plc Wrigley

Wrigley has unveiled its new Global Innovations Centre in Chicago,
asserting its commitment to expanding beyond chewing gum into the
wider confectionery market.

The centre has required $45 million of investment so far and is designed to enable Wrigley to diversify and meet the needs of future consumers as it vies to rival Hershey and Cadbury Schweppes in the wider confectionery arena.

This move could well prove highly lucrative. The company has established what it claims to be one of the best distribution set-ups in the world and believes that it is in a perfect position to exploit this to its full extent by producing a wider range of confectionery products.

Motivation for the move may also be caused by Cadbury Schweppes' entry into the chewing gum market with its acquisition of Adams. This has come at a cost to Wrigley, which does 90 per cent of its trade in the confection. Therefore Wrigley may feel it needs to expand itself if it is to compete.

Founded in 1891 and with global sales of $4 billion last year, Wrigley's commitment to total confectionery is certainly high on the agenda. The company has previously stated that it would consider developing a wide variety of confectionery products in the future.

Wrigley's transformation from being a gum company into a wider confectionery business was confirmed in 2002 when it tabled a $12 billion bid to try and buy Hershey, only to be blocked by Hershey's trust. It subsequently invested $1.64 billion by purchasing some key confectionery brands from Kraft Foods, Altoids, Life Savers, Crème Savers, and Sugus, which have all contributed to Wrigley's developing portfolio.

Wrigley's commitment to innovation in different areas of confectionery is sure to concern the likes of Hershey and Cadbury Schweppes, which will inevitably suffer reduced market share. However they may too decide to further broaden their confectionery horizons.

Related topics Processing & Packaging Gum

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