CEO interview
Perfetti Van Melle USA brings Airheads into gum and trials Velcro packs
The company’s US business – Perfetti Van Melle USA – hopes to attract younger consumers to the category by bringing Airheads to gum and hopes convenience packs of Mentos Pure Fresh, sealed with Velcro Press-Lok Closures*, can increase household penetration among adults.
‘A right to win’ with Airhead in gum
Speaking to ConfectioneryNews at last month’s Sweets & Snacks Expo in Chicago, Mehmet Yuksek, president and CEO of Perfetti Van Melle USA, said: "We feel we have a right to win with Airheads in the gum category.
“With Airheads we have high credentials in delivering fruit flavors and fruit flavors in gum is still about 30-35% of the market.”
Perfetti has begun to ship Airheads gum in the US. The product is sugarfree and comes in the brand’s three most popular flavors: Watermelon, cherry and blue raspberry.
The gum contains fruit-popping micro-candies that burst as you chew. The brand extension will retail for a suggested price of $1.19 in a 14-piece pack.
"While we continue to play in gum with Mentos Pure Fresh as our flagship brand, when we talk to young consumers we see Airheads has this equity…to play [in other categories],” said Yuksek.
Velcro packs
Perfetti Van Melle USA hopes to increase Mentos Pure Fresh distribution with portable wallet packs sealed by Velcro Brand Press-Lok Closures that will launch in November 2017.
"It's going to be a trial pack that's going to help bring a lot of new consumers to the category, to stay there and to hopefully trade up later on,” said Yuksek.
The Velcro packs will contain 12 pieces of sugar-free gum and will retail for a suggested price of $1.19.
"We’re also enhancing our position in the whitening space,” added Yuksek.
Whitening gum
The company launched Mentos Always White at the Expo in Chicago. The 100 piece non-filled gum comes with smaller pieces that contain active whitening ingredient tripolyphosphate.
The product – retailing for a suggested $3.49 - carries on-pack claim that chewing four pieces three times a day for 10 minutes helps reduce staining in six weeks.
Mentos is currently the number six gum brand in the US by revenue, estimates Yuksek.
Transition to bottles
Perfetti Van Melle USA hopes its latest innovations can help overturn continued declines in US gum category sales.
"Gum is a challenged category,” said Yuksek.
“Everyone has been trying to put their finger on it for the last 10 years, but nobody has come up with a silver bullet,” he said.
US gum dollar sales fell 2.2% to $3.1bn for the 52 weeks up to December 25, 2016, according to IRI.
“But what has been important is this transition to bottle [packaging] - that has helped saved some of the lost sales,” said Perfetti’s US CEO.
"If it wasn't for the bottles and for us, unfortunately the decline in gum would have been steeper," he said.
Perfetti Van Melle sugarless gum sales were up 21% to $170m for the 52 weeks up to August 7, 2016, according to IRI.
Perfetti grew its value market share 1% to make up around 6% of total US sugarless gum sales.
Project7 and Hershey’s Ice Breakers gum also made share gains, while Mondelēz and Wrigley both lost market share.
‘Seismic changes’: Self-service checkouts and e-commerce
Yusek said Perfetti was responding to “seismic change” in retail and the rise of self-service checkouts that may not stock gum. He said the company was speaking regularly with retailers to ensure bestsellers are available at touch points throughout stores.
"Ranging from Walmart to other retailers we have our gum available in different parts of the store. But we equally target the regular checkouts and make sure they have the right mix,” he said.
The company has also built a dedicated e-commerce team, while Mentos and Airheads were early adopters of the Amazon Dash button. "Amazon comes up as top of mind for everyone,” said Yuksek.
US capacity investment
Perfetti Van Melle USA’s CEO said the global Perfetti group was committed to growing in the US and Canada.
Around 15% of Perfetti Van Melle's global sales come in the US. "And it's growing," said Yuksek. "We would like for it to be north of 20% [by 2020]."
He added: “We’re investing in our facility in Erlanger, Kentucky. We are bringing multimillion dollar investment both in capacity expansion as well as bringing new packaging lines.”
Perfetti will invest $11m to increase capacity by almost 50% and add 70 full-time jobs at the northern Kentucky facility, which opened in 1984. It is the company’s sole US factory and currently employs about 300 people.
The Perfetti Van Melle group has corporate headquarters in Italy and The Netherlands.
What about Chupa Chups?
Chupa Chups have been imported to the US and distributed by New Jersey-based Euro American Brands since 2010. Perfetti Van Melle USA CEO Mehmet Yuksek said: "We still think the lollipop market represents a significant potential. But we focused on other priorities (Mentos and Airheads) in the past couple of years. Chupa Chups is a cherished global brand for us. The current business is growing in the US, so we will take the next couple of years see where we as a group can take it."
*VELCRO® Brand PRESS-LOK® Closures
