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Sticky problems: Economic downturn to stunt global chewing gum growth

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Sticky problems: Economic downturn to stunt global chewing gum growth

July 08
11:25 2013

Global chewing gum growth is being stunted by the economic downturn and declining numbers of children and teenagers, says Leatherhead.

The global chewing gum market was valued at $26bn in 2012, according the Leatherhead figures, up 14% from 2008. Overall market value is expected to surge another 15% to $30bn by 2015.

However, Jonathan Thomas, primary market analyst at Leatherhead, said value in developed markets was likely to decrease.

“The chewing gum sector has been one of the most consistent performers within the global confectionery industry in recent years. However, growth has now started to moderate, following static or falling consumption levels in certain parts of the world – examples include the more developed markets of Western Europe and North America,” Thomas said in Leatherhead’s monthly confectionery analysis report.

The market has been hit hard by the global economic downturn and lower consumer spending, he said, but also declining numbers of a key target group – children and teenagers.

For these reasons, the developed world will continue to see its share of global market value decrease, he said. For example, the UK chewing gum market fell by 0.9% last year, he added.

Health and functionality

Thomas said leading suppliers have attempted to address the economic downturn through innovation, such as developing new flavors and formats.

A health focus has contributed to growth in recent years, he said, with sugar-free gum and functional varieties – like breath-freshening, tooth-whitening and medicated gums – doing well in developed and less developed markets like China and Brazil.

Sugar-free gum now accounts for 75% of the global market, he said, accounting for the vast majority of sales in many European markets.

“[It’s] also making an impact in some of the world’s less developed markets as awareness of dental health and usage of alternative sweeteners such as xylitol spreads.”

Manufacturing cut-backs

The US is the largest producer of gum with an output of an estimated 145,000 tons in 2012, Leatherhead figures show. Brazil comes in second with 125,000 tons followed by Mexico at 92,000 tons and China with 65,000 tons.

However, Thomas said: “Production levels in the US have fallen in recent years, as many leading suppliers have either scaled back manufacturing efforts or relocated to parts of the world where labor costs are lower.”

Despite this production levels remain relatively high in European countries like France, the UK and Russia.

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