Wm. Wrigley Jr. Company
Address:
410 North Michigan Avenue
Chicago, Illinois 60611
U.S.A.
Telephone: (312) 644-2121
Fax: (312) 644-0097
http://www.wrigley.com
Statistics:
Public Company
Incorporated: 1919
Employees: 11,250
Sales: $2.7 billion (2002)
Stock Exchanges: New York
Ticker Symbol: WWY
NAIC: 31134 Nonchocolate Confectionery Manufacturing
Company Perspectives:
In our pursuit of generational growth and prosperity for our stakeholders, the entire Wrigley organization is committed to acting in a manner consistent with the shared values we hold paramount. We treat each other with trust, dignity, and respect; we create an environment where people from diverse cultures and backgrounds work together effectively; we support and have the courage to take measured risk; we act with a sense of urgency without sacrificing excellence; we foster a spirit of innovation in all areas of our business; and we strive for effective communication that results in teamwork, shared knowledge, and ideas.
Key Dates:
1891: William Wrigley Jr. moves to Chicago to establish a western agency for his father's soap business.
1893: Wrigley's Spearmint and Juicy Fruit gum are launched.
1910: International expansion begins in Canada.
1914: Wrigley's Doublemint gum makes its debut.
1944: The company introduces a temporary brand called Orbit during the war effort.
1975: Freedent is launched.
1976: Big Red enters the market.
1984: Extra sugar-free chewing gum is added to the firm's product arsenal.
1994: The Winterfresh brand is introduced.
1999: William Wrigley Jr. becomes the fourth generation to head the company.
Company History:
With over 110 years of success under its belt, Wm. Wrigley Jr. Company operates as the largest chewing gum manufacturer in the world, supplying nearly half of all chewing gum sold in the United States. The firm is a market leader in Europe as well, securing almost 50 percent of the continent's gum profits. Wrigley dominates the gum industry with well known brands, including Juicy Fruit, Doublemint, Big Red, and Wrigley's Spearmint gum. Other brands sold worldwide include Airwaves, Alpine, Eclipse, Extra, Freedent, Hubba Bubba, Orbit, P.K., and Winterfresh. Subsidiary Amurol Confections Company also manufacturers chewing gum and confectionary products for adults and youths under such names as Big League Chew, Bubble Tape, Hubba Bubba Sweet Roll, Squeeze Pop, and Velamints. Fourth generation William Wrigley Jr. heads up the company as president and CEO.
Working in the Soap Business in the Late 1800s
William Wrigley Jr. (who never used a comma in his name) began his career in business as a mischievous teenager in Philadelphia during the 1870s. After running away from home at the age of 11 and suffering through repeated expulsions from school, the young Wrigley reportedly was told by his father after a pie throwing incident, "Your school life hasn't been a success. Let's see how work strikes you."
The elder Wrigley put his son to work in his soap factory, giving him the job of stirring the soap vats with a large paddle. Working ten hours a day, the boy was paid only $1.50 per week. After serving a year as a soap stirrer, Wrigley won a promotion to the sales staff. Still in his teens, the junior Wrigley drove a horse-drawn wagon loaded with soap through the crowded metropolises of the northeastern United States. Peddling soap, Wrigley soon learned the importance of gentle persuasion. He learned to make friends through kind, deferential conversation, and, in the process, move tons of soap.
In 1891, at the age of 29, Wrigley moved to Chicago to establish a western agency for his father's soap business. The product, however, was shunned by local merchants who complained that, priced at only five cents per box, the soap provided them with almost no profit margin. Wrigley convinced his father to double the retail price of the soap and induce sales through premiums. Wrigley purchased 65,000 cheap red umbrellas to give away with soap purchases. While the dye in the umbrellas ran when it rained, the devices succeeded in selling a lot of soap. In addition, while the concept required some fine tuning, the experience confirmed to Wrigley that premiums were a good idea and an effective sales aid. "Everybody likes something extra, for nothing," he once said.
At this point, Wrigley decided to strike out on his own as an independent soap wholesaler. He chose to give away baking powder as a premium and, oddly, promoted soap sales with a cookbook. Before long, demand for the baking powder outstripped demand for the soap. In 1892, Wrigley abandoned the soap business altogether to concentrate on selling baking powder. However, tiring of the business, he chose not to offer soap as the premium for baking powder. Instead, he began to search for a new premium. Wrigley probably first saw chewing gum as a young soap peddler. Long in existence, gum extracted from spruce bark had been used by Native Americans as a relaxing and habit-forming pastime.
Gum in the 1890s was still extracted from spruce gum and from paraffin, a tasteless and odorless waxy petroleum product that refused to be chewed down. These primitive gums could hold flavoring agents, such as licorice extracts, but became tasteless globs after only a few minutes of energetic chewing. At the time, only about a dozen gum companies existed. After conducting some research, Wrigley suggested to his supplier, Zeno Manufacturing, that it try making gum with chicle, a coagulated latex extract from tropical sapodilla trees. Until this time, chicle was used primarily in the manufacture of rubber.
Wrigley's Spearmint and Juicy Fruit Make Their Debut: 1893
As with the soap before it, demand for the new chicle-based "chewing candy" outstripped demand for the baking powder. In 1909, Wrigley bought out Zeno and merged the two companies into the Wm. Wrigley Jr. Company. The new company introduced two new brands to the market. The Vassar brand was targeted to women, while Lotta Gum was intended for the general market. In 1893, the company rolled out Wrigley's Spearmint, a cool, minty gum that freshened the breath, and later that year introduced a sweeter, fruit-flavored gum called Juicy Fruit.
Juicy Fruit, first packaged in a pale grey wrapper with red lettering (the distinctive yellow package did not appear until after World War II), stood out from other brands, and the fruit extracts used in Juicy Fruit held their flavor in the chicle gum. Wrigley's Spearmint, meanwhile, was wrapped in a solid white package. Both brands, wrapped five sticks to a package, featured a design that clearly identified the gums as a Wrigley product. Wrigley's Spearmint and Juicy Fruit proved so popular that Wrigley soon found no reason to continue manufacturing Vassar or Lotta Gum.
In 1899, Wrigley was invited to join six other chewing gum manufacturers who were banding together to form a trust. He refused, and soon found himself engaged in a nearly ruinous competition with them. As he himself was once a wholesaler, Wrigley understood the importance of supporting his retailers. Convinced that he could extend the application of premiums to dealers, Wrigley gave them free coffee grinders, cash registers, scales, lamps, and other appliances. Having won their respect, if not their allegiance, Wrigley found it that much easier to foist Wrigley display cases upon retailers. Nevertheless, despite his best efforts, sales remained flat. He gambled on two expensive, but ineffective, advertising campaigns--each costing in excess of $100,000--and when even these had no effect, he was left broke.
Advertising Begins in 1907
The financial panic of 1907, a drawn-out recessionary crisis that largely evaporated the demand for advertising, presented Wrigley with another opportunity to gamble. Still broke but finding advertising rates deeply discounted, Wrigley borrowed $250,000 and in three days purchased advertising space that would otherwise have cost him $1.5 million. This scale of advertising, he reasoned, would cause a reaction among consumers.
Striking quickly, with his competitors still shy from the recession, Wrigley timed his advertising campaign to run concurrent with a new dealer promotion. He sent retailers coupons for free boxes of Wrigley's Spearmint, redeemable from Wrigley distributors. When the dealers redeemed their coupons, they made themselves known to the distributors, who assembled a valuable list of retailers and methodically built relationships with them. Wrigley implored his salesmen always to be pleasant, patient, and on time.
In advertising, his now famous credo was, "Tell 'em quick and tell 'em often." The simple messages of his campaign, and the complex strategy behind it, were highly successful. In a matter of weeks, Wrigley had grown its market from the Midwest to the entire nation. By 1910, as sales increased from $170,000 to more than $3 million, Wrigley's Spearmint became the largest-selling brand in the nation.
Looking for additional markets, Wrigley turned its attention to English-speaking foreign countries. In Great Britain, however, the practice of chewing gum was held in low esteem. In fact, it was viewed as a habit every bit as distasteful as chewing tobacco. After failing to find a profitable market in Great Britain, the company next turned to British dominions and established factories in Canada in 1910 and in Australia in 1915.
Wrigley maintained a few other minor brands of chewing gum, including Sweet 16, Licorice, Pepsin, Blood Orange, Pineapple, Banana, and Lemon Cream. However, lacking the marketing muscle and, consequently, the popularity of the flagship brands, these flavors were gradually phased out. In 1914, fearing stagnation in the product line, Wrigley added a new peppermint flavor, Doublemint. Wrapped in a bold green package--but with a two headed arrow logo--the new brand has been touted as "double strength," "double good," and "double distilled."
To keep the Wrigley name in the public consciousness, Wrigley bought huge public billboards, upon which he plastered his simple advertising messages: "Doublemint, Double Good" and "Chew Juicy Fruit." After 1930, Doublemint was promoted consistently with twins, double images, and even a double-talking radio comedian. Wrigley sponsored the Lone Wolf radio show and created a fictitious Indian tribe in which more than 100,000 children were signed up as members. In one spectacular stunt, which possibly marked the birth of direct marketing, Wrigley mailed a complimentary four-stick package of gum to every household in the United States that owned a telephone. People with telephones, he reasoned, could afford gum. These activities helped to sustain Wrigley's gum as established national brands. They also made Wrigley very rich, particularly after he took his company public in 1919.
With his profits, Wrigley purchased a share in the Chicago Cubs baseball team in 1916 and, after buying out his partners' interests in the team, collected the talent needed to win the pennant in 1929. Before his death in 1932, and with astounding foresight, he purchased Catalina Island near Los Angeles and developed it into a major tourist attraction. These endeavors helped to keep the Wrigley family in good financial health through the difficult years of the Great Depression.
As the economy slowly recovered from the hardships of the crisis, Wrigley maintained its strong position in the market under the leadership of Wrigley's only son, Philip K. Wrigley. The company made headway into the British market, establishing a factory there in 1927 and introducing a pellet-shaped brand of gum. Called P.K, the brand was named for the company's slogan, "Packed tight, Kept right," not for Philip Wrigley's initials as many had claimed.
Survival during the War Effort
The company entered a potentially disastrous era as the United States escalated its involvement in the war in Europe. After the Japanese bombing of Pearl Harbor, the company found shipping unavailable and quality ingredients in increasingly short supply. Production of Wrigley's three famous brands had to be severely scaled back, and all of the gum that could be manufactured was sent to the armed forces, whose use of the gum reportedly helped to relax and revitalize them.
Left only with inferior ingredients, the company in 1944 introduced a temporary brand called Orbit. Admitting that the brand was not up to its standards, Wrigley was secure in the knowledge that Orbit would disappear when the company could again sell its premium brands. To avoid confusion or consumer dissatisfaction, Wrigley gave the new gum an entirely different package design that did not include the trademark arrow.
Soon, however, Wrigley found it impossible to produce its premium brands even for the military. For the remainder of the war, the company produced only Orbit but continued to advertise its regular brands. In billboard and print advertisements, the company featured an empty Wrigley's Spearmint wrapper with the caption, "Remember this wrapper!" The campaign was so successful that when the war ended and the brands were reintroduced (and production of Orbit ceased), pent up demand caused consumption of Wrigley's Spearmint, Doublemint, and Juicy Fruit to exceed prewar levels.
Dedicated to maintaining the value of the company's brands to consumers, Wrigley insisted that the price of the product be held at five cents per package. This was in keeping with William Wrigley's business credo that restraint in regard to immediate profits was not only the company's most profitable policy but probably the company's only profitable policy.
By holding the line against price increases, Wrigley built strong dealer confidence in his brands and held his raw materials suppliers to more stable terms. However, this was only possible because the company dominated the market for chewing gum and was able to incorporate newer, more efficient production and distribution methods. In time, Wrigley's competitors were forced to raised the price of their products. This won the company even greater loyalty from retailers and convinced many consumers to abandon their brands for Wrigley.
Overcoming Image and Pricing Obstacles: 1960s-1970s
In 1962, dissatisfied with low sales in Britain, Wrigley launched an educational advertising campaign aimed at ending the social prejudice against gum chewing. In an effort to illustrate circumstances in which gum chewing was not socially unacceptable, the company ran a series of advertisements over the tagline, "Certainly not!" The advertisements featured barristers, businessmen, and students in scenarios where gum chewing might offend others. The advertisements were taken so seriously by the British public that many wrote to the company demanding to know when and where they could chew gum. The campaign was altered to depict acceptable circumstances for using the product, and sales began to climb.
In 1971, after charging only five cents for his product for more than 50 years, Wrigley was no longer able to extract greater efficiency from its operation. Philip Wrigley was painfully aware of price sensitivity. His father often told his managers, "We are a five-cent business, and no one in this company can afford to forget it." With great consternation but no alternatives, the company raised the price of its five-stick packages from five to seven cents. Inflationary pressures brought on by the oil crisis in the early 1970s inevitably forced the company to institute additional price increases in the years that followed.
By 1974, these increases eroded the price advantage Wrigley brands held over competitors. Upstarts such as sugar-free Trident and cinnamon-flavored Dentyne began to win market share from Wrigley brands. To meet this competition, Wrigley introduced Freedent, which had the admirable quality of not sticking to dental work. In 1976, the company rolled out Big Red, a cinnamon gum slightly hotter and in a larger stick than Dentyne. Both new brands, the first in years, came in Wrigley-style packages.
In an attempt to stave off Trident and other popular sugar-free gums, Wrigley introduced its own sugar-free brand in 1977, giving it the World War II-era name Orbit. However, after xylitol, the artificial sweetener used in Orbit, was declared carcinogenic, sales of Orbit plummeted and the brand was withdrawn. Also in 1977, Philip Wrigley died. His son, William Wrigley, assumed leadership of the company after having served as president since 1961.
Under the new Wrigley leadership, the company began an effort to win greater market share among teen and adolescent age groups and introduced Hubba Bubba in 1979. This gum, which boasted zeppelin-sized bubbles, encountered strong competition from Bubblicious and Bubble Yum, whose manufacturers outspent Wrigley on promotion. Amidst declining sales, Hubba Bubba was transferred to Amurol, a subsidiary of the Wrigley Company. In the 1980s, Wrigley again found success with new products; the company re-entered the battle for sugar-free gum chewers in 1984 when it introduced Extra, a brand sweetened with aspartame that soon gave birth to its own extensions. Over a period of years, Extra became available in a half dozen flavors.
Successful Advertising: 1980s to the Early 1990s
During the 1980s, Wrigley returned to heavy television promotion of its brands using the single, simple slogan, "Pure chewing satisfaction." The message remained true to William Wrigley's "Tell 'em quick, tell 'em often" advice and gave Wrigley a wholesome, super sweet image. This conservative approach was consistent with Wrigley's reputation for quality and purity. Still sensitive to the social stigma of chewing gum in public, the company did not portray people chewing gum in its advertisements until the 1980s, and for that it used a pair of attractive, young female twins.
The company's advertising agency, BBDO Chicago (located, incidentally, in the Wrigley Building), scored a relative coup with a new campaign launched in 1990. In a series of spots, Wrigley's Spearmint was positioned as an alternative to smoking in instances where smoking is not permitted. Using words such as "House Guest," "Office Policy," and "Frequent Flyer"--with the letters O and Q substituted with a red slashed circle over a cigarette--a voice-over explains, "When I can't smoke, I enjoy pure chewing satisfaction." The Wrigley advertisement broke new ground for addressing the sticky social question of smokers' and non-smokers' rights. While steering clear of judging the virtues of smoking, the advertisements suggested new ways people could use the company's product to solve a difficult situation.
While Wrigley brands tended to carry a more staid image, the company maintained the strongest reputation in the market for quality and specialty. After more than 100 years in business, the company--under the stewardship of the third William Wrigley through much of the 1990s--made no attempt to diversify into different product lines. While Wrigley's Amurol subsidiary produced novelty and specialty confectionery products such as suckers and roll candy, the company refused to venture into the food, consumer products, or chemical industries, where its major competitors at the time, RJR Nabisco and Warner-Lambert, were most heavily concentrated.
Changing Direction: 1990s and Beyond
Eyeing international expansion as crucial to business growth, Wrigley spent much of the 1990s focused on moving into lucrative Asian and European markets. In 1992, the company opened a Chinese manufacturing facility in Guangzhou. During that year, international sales grew at a faster pace than the company's domestic sales and accounted for 45 percent of overall revenues. By 1993, construction plans were underway for plants in Bangalore, India, and in Poznan, Poland. The firm also began to expand and upgrade its existing facilities in England and France.
Wrigley's international efforts proved to be a success. In 1994, international sales outpaced that of domestic sales, accounting for over half of the company's overall revenues for the first time in its history. Domestic sales began to drop off, however, a sure sign that Wrigley's product line needed some new attention. As such, Winterfresh mint chewing gum was launched in 1994 in an attempt to jumpstart sluggish financial results. Expansion efforts continued to remain at the forefront of the company's strategy, and despite lackluster domestic results Wrigley forged ahead in international markets. In 1996, the firm began construction on a new plant in St. Petersburg, Russia.
Fourth generation William Wrigley Jr. took over the helm at Wrigley in 1999 after the sudden death of his father in March. By this time, international sales were slowing, the firm's stellar earnings pace had fallen off, and Wrigley's U.S. sales were unremarkable. The new leader immediately pumped new blood into the conservative firm, hiring executives from outside firms and planning for expansion--this time through new product development and acquisition. In a January 2001 Forbes interview, Wrigley Jr. commented on his place in the company claiming, "I see my role as taking a late-19th-century company and bringing it into the 21st century with guns blazing."
Indeed, during the early years of the new century, the CEO made several significant moves. The firm created a healthcare division that launched such new products as Surpass, an antacid chewing gum. This new product did not meet company expectations, however, and was taken off the market in 2003. Wrigley's other endeavors proved to be better suited for the firm. During 2001, the Velamints breath mints business was acquired from Chicago-based Ragold Inc. The firm bolstered its product line in 2002 with the launch of Eclipse Flash strips, dissolvable films that promoted fresh breath, and Orbit Drops, a brand of sugar-free lozenges. It also began a marketing campaign aimed at sprucing up its mainstay brands.
Wrigley's signaled its commitment to growth through acquisition in 2002 when it made a surprising $12.5 billion play for Hershey Foods Corporation. The deal never reached fruition and left the firm looking for future deals. During 2003, the company was focused on six strategic goals: boosting its core business, expanding into new geographic and distribution areas, domestic diversification, product innovation, delivering high quality at a low cost, and developing a successful workforce.
Wrigley's desire for major expansion left some industry observers questioning its strategy. On one hand, an acquisition could catapult the firm into the upper echelon of the foods and candy industry. On the other hand, it could spell disaster for a traditionally conservative, family-run firm. Regardless of the company's future direction, one thing was certain--gum chewers would no doubt continue to purchase Juicy Fruit, Doublemint, Big Red, and Wrigley's Spearmint gum for years to come.
Principal Subsidiaries: Wrigley Manufacturing Company LLC; Amurol Confections Company; Four-Ten Corporation; Wrigley Sales Company; L.A. Dreyfus Company; Northwestern Flavors LLC.
Principal Competitors: Groupo Bimbo S.A.; Pfizer Inc.; The Topps Company Inc.
Further Reading:
- Anderson, Veronica, "Wrigley's Sales Gains Abroad Bolster Expansion Program," Crain's Chicago Business, April 10. 1995, p. 48.
- Arndorfer, James B., "Wrigley Sharpens Its Sweet Tooth," Crain's Chicago Business, February 24, 2003, p. 3.
- Boorstin, Julia, "Why Is Wrigley So Wrapped Up?," Fortune, March 3, 2003, p. 133.
- Heuslein, William, "Wm. Wrigley Jr. Co.: Getting Unstuck," Forbes, January 8, 2001, p. 138.
- "Impulse Item," Wall Street Journal, May 29, 1991.
- "Note to Wrigley: Don't Gum Up Growth Strategy," Crain's Chicago Business, September 30, 2002, p. 10.
- Rewick, C.J., "Despite Economic Turmoil, Asia Offers Wrigley Lots to Chew On," Crain's Chicago Business, March 8, 1998, p. 6.
- ------, "Wrigley Scion Takes Company Reins," Crain's Chicago Business, March 15, 1999, p. 3.
- "The Wonder Story of Wrigley," American Magazine, March 1920.
- "Wrigley's Big Bite," Brandweek, December 11, 2000, p. 3.
- "Wrigley Won't Stick with the Pack," The Financial Post, April 30, 1994, p. 54.
Source: International Directory of Company Histories, Vol. 58. St. James Press, 2004.
