Wrigley sales gains offset stagnant markets

By Neil Merrett

- Last updated on GMT

Related tags: Wrigley, Confectionery, Revenue, Wm. wrigley jr. company

Confectioner Wrigley posted a 17 per cent sales rise throughout its
global operations during its first quarter 2007 to US$1.6bn
(€1.1bn), with demand from emerging markets propping up
sluggish growth in North America

The chewing gum giant attributed the revenue growth to a rise in demand from emerging markets. The company's strategy has been to diversify into new regions and product lines as demand in its core markets remains at a plateau. The group's operating margins were down for the period by 0.1 of a percentage point to 51.8 per cent as the costs of restructuring took effect. Wrigley's senior vice president Reuben Gamoran remained positive about the slight fall, suggesting the company would soon benefit from changes made to its operating structure. "Given today's more challenging cost and competitive environment, we are satisfied with the improvements in gross margin versus the previous quarter and with our ability to essentially hold steady versus a year ago,"​ he stated. The company has finished restructuring its supply chain, a move that will save the company about $20m (€14.5m) during 2007 and provide a buffer against further cost pressures during the year, he said. Wrigley appears to already be benefiting from this supply chain restructuring particularly in the emerging markets of Asia and Eastern Europe. Of its regional operations, Europe, the Middle East, Africa and India (EMEAI) led the way, with sales up for the quarter by 27 per cent to $565m (€416m). The company attributed the performance in particular to its key markets in Europe. Double digit sales gains within the UK, aided by new product launches, and its bottle packaging operations in Germany were among the regional highlights. Russia and Ukraine also helped drive the region's success, with strong sales of its Orbit brand and sugar free products. Revenues in Asia were up 23 per cent to $217m (€160m). The rise was a result of the company's dominance of China's confectionery markets through its Extra, Doublemint and Sugus brands, Wrigley said. However, Wrigley's native North American operations remained stagnant with sales up 3 per cent for the quarter to $414m (€305m). Gains made through sales of Orbit, Orbit White, and Eclipse were setback by weaker sales of its Altoids sours range. Wrigley added it still remained confident about its US performance, pointing to the strength in the market for mint and gummy products.

Related topics: Manufacturers, Gum

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