CATEGORY - GUMS

AGENDA History & Fun Facts Category trend Channels/retailers driving the category Top brands Brands driving the category Pricing Overview Promotional Overview Seasonality Conclusion

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HISTORY OF GUMS Ancient Greeks chewed gum

thousands of years ago Modern chewing gum was first

developed in the 1848 First Bubble gum was invented in

1928 Sugar free gums entered in 1950s More than 1000 varieties in US US & India statistics – 182 v/s 4

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FUN FACTS World’s oldest piece of gum is 9000

years old Most Popular during World War 2 Illegal to chew gums in Singapore Chewing on gum while cutting onions

can help a person from producing tears Improves concentration & memory,

eases tension, smoking cessation Total amount of gum sold in one year

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Year 2006 Year 2007 Year 2008 Year 2009 Year 2010 YTD Jul 10, 2011

L 52 WE Jul 10, 2011

$1,136,295,936$1,225,911,040 $1,301,781,760 $1,376,970,624 $1,415,308,160

$758,478,144

$1,405,742,208

+6.2% +5.8% +2.8%

-1.2%

+0.6%+7.9%

CATEGORY GUM, TOTAL US FDMX- DOLLAR SALES TREND

In Millions

• The Gum Category is valued at $1.42 billions in the year 2010, posting a growth of +2.8% vs. prior year. While in the latest 52 weeks ending July 2011, show relatively flat sales (slightly up, +0.6%) vs. prior year.

• The category experienced gains in dollar sales over the 5 calendar years while decline in growth rate can be seen each year.

• According to recent research from Mintel, the gum, mints and breath fresheners market has seen sales growing through the recession, increasing over 10% since 2007, and is expected to continue growing through 2014.

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Year 2006 Year 2007 Year 2008 Year 2009 Year 2010920,000,000

940,000,000

960,000,000

980,000,000

1,000,000,000

1,020,000,000

1,040,000,000

1,060,000,000

1,080,000,000

3,650,000,0003,700,000,0003,750,000,0003,800,000,0003,850,000,0003,900,000,0003,950,000,0004,000,000,0004,050,000,0004,100,000,0004,150,000,000

1,070,832,448

1,034,881,152

1,009,252,224

978,469,248 983,685,760

3,838,809,6003,892,358,912

3,977,064,704 3,987,781,120

4,118,601,472

Unit Sales Volume Sales

CATEGORY GUM, TOTAL US FDMX- UNIT/ VOLUME COMPARISON

• The unit sales of Gum Category has reduced from 2006 to 2009 and only a marginal increase(0.5%) is seen in 2010.

• The volume sales of Gum Category has constantly seen positive growth from 2006 through 2010.

• It is also observed that the dollar sales of Gum Category has constantly seen positive growth from 2006 through 2010.

-3%-2.5%

-3.4%

+0.5%

+0.3%

+2.2%

+1.4%

+3.3%

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Year 2006 Year 2007 Year 2008 Year 2009 Year 2010

$1.06 $1.18

$1.29 $1.41 $1.44

Average Price Per UnitAvg Price Per Unit +11.6

%

+8.9%

+9.1%

+2.4%

Year 2006 Year 2007 Year 2008 Year 2009 Year 2010

$0.30 $0.31

$0.33 $0.35 $0.34

Average Price Per VolumeAvg Price Per Vo...

+6.4%

+3.9% -0.5%+5.5%

• The average price per unit had increased substantially over the time period 2006 to 2010.

• But, the average price per Volume has not increased on par with the average price per unit.

• Basing on these two observations we can conclude that the average volume per unit has increased in the same time period.

CATEGORY GUM, TOTAL US FDMX- PRICING TRENDS7

13 WE A

pr 2,

2006

13 WE J

ul 2,

2006

13 WE O

ct 1,

2006

13 WE D

ec 31,

2006

13 WE A

pr 1,

2007

13 WE J

ul 1,

2007

13 WE S

ep 30

, 200

7

13 WE D

ec 30

, 2007

13 WE M

ar 30

, 200

8

13 WE J

un 29

, 200

8

13 WE S

ep 28

, 200

8

13 WE D

ec 28

, 2008

13 WE M

ar 29

, 200

9

13 WE J

un 28

, 200

9

13 WE S

ep 27

, 200

9

13 WE D

ec 27

, 2009

13 WE M

ar 28

, 201

0

13 WE J

un 27

, 201

0

13 WE S

ep 26

, 201

0

13 WE D

ec 26

, 201

0

13 WE M

ar 27

, 201

1

13 WE J

un 26

, 201

1 $-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$277,970,336

$294,395,968

$274,089,600

$289,840,000

$287,184,320

$315,654,208

$304,329,920

$318,742,656

$319,019,488

$330,342,016

$317,893,792

$334,526,496

$337,057,280 $359,889,056

$329,513,600 $350,510,720 $344,910,528

$370,854,624 $340,451,584

$359,091,392 $342,046,752

$365,653,888

$165,392,544

$171,305,792

$160,971,728

$160,066,992

$166,438,096

$180,392,976

$175,571,664

$173,828,048

$181,692,400

$188,078,512

$181,370,128

$183,720,432

$195,934,880

$206,178,896

$192,475,728

$195,428,480

$197,980,816

$212,747,952

$200,729,424

$200,863,136

$196,815,136

$205,464,784

$71,495,288 $76,894,136 $70,532,176 $78,230,432 $75,595,744 $84,367,752 $79,304,672 $86,220,928 $85,640,408 $89,387,648 $84,683,016 $89,760,632 $89,310,496 $96,963,360 $86,058,120 $92,134,176 $93,502,696 $99,571,104 $86,625,408 $93,634,024 $92,641,576 $101,855,840

Dollar Sales F/D/MxDollar Sales FOODDollar Sales DRUG

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DOLLAR SALES TREND BY 13 WEEKS, 2006-2011

DOLLAR SALES CHANGE BY CHANNEL

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F/D/Mx

FOOD

DRUG

$87,683,552

$40,072,240

$30,360,552

Latest 52 Weeks Ending Jul 10, 2011

In Mil-lion

Latest 52 WE Jul 10, 2011

Year 2006 Year 2007 Year 2008 Year 2009 Year 2010 YTD Jul 10, 2011

57% 58% 57% 56% 57% 57% 57%

27% 26% 27% 27% 26% 26% 27%

16% 16% 17% 17% 16% 16% 16%

TOTAL U.S. - MassX TOTAL U.S. - DRUG TOTAL U.S. - FOOD

DOLLAR SHARE OF FDMX10

The dollar share for Total U.S food is about 57%, for Total U.S Drug is about 27% and for Total U.S MassX is about 17% from 2006 through 2011.

WILLIAM WRIGLEY JR. CO SUGARLESS GUM;

49.59KRAFT FOODS INC SUGARLESS GUM;

31.33

WILLIAM WRIGLEY JR. CO REGULAR GUM (NO SUGAR-

LESS); 8.81PERFETTI VAN MELLE SUGARLESS GUM;

3.23THE HERSHEY COMPANY SUGARLESS GUM;

2.76CONCORD CONFECTIONS INC REGULAR

GUM (NO SUGARLESS); 1.02Wrigley’s Sugarless gum forms more than 49% of the dollar share followed by Kraft foods sugarless gum.The top 5 types of gums form more than 95% of the dollar share of Total F/D/Mx market.It clearly shows that the Sugarless gum is more popular than the No Sugarless gum.

VENDORS DRIVING THE GUM CATEGORY F/D/MX, FOR 52 WE 10-7-1111

RETAILERS DRIVING THE CATEGORY-TOP 10 RMAS

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13%

13%

11%

10%

9%

9%

9%

9%

9%

7% TARGET CORP RMA

TARGET TTL CORP-RMA

TARGET TTL W/O SUPER-RMA

WALGREENS-CORPORATE W/ DUANE READE-RMA - DRUG

WALGREENS CORPORATE-RMA - DRUG

CVS+LONGS CORPORATE TOTAL-RMA - DRUG

WALGREENS CORPORATE W/O PUERTO RICO-RMA - DRUG

KROGER CORPORATE-RMA - FOOD

CVS CORPORATE TOTAL-RMA - DRUG

KROGER COORDINATED-RMA - FOOD

• The top 10 RMAs comprise about 33% dollar share of the all the RMAs put together.

• We can notice that Target has a share of 37% , Walgreens has a share of 29%, CVS has a share of 18% and Kroger has a share of 16% .

TOP BRANDS

ORBIT SUGARLESSTRIDENT SUGARLESS

WRIGLEYS EXTRA SUGARLESSWRIGLEYS ECLIPSE SUGARLESS

WRIGLEYS 5 SUGARLESS

926643

557450

404

TOTAL U.S. - F/D/Mx 2007 to Latest Dollar Sales (US$ Million)

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Contributes 70% market share Merchandising, Flavor & Packaging

Strategies

BRANDS DRIVING THE CATEGORY

ORBIT SUGARLESS

TRIDENT SUGARLESS

WRIGLEYS EXTRA SUGARLESS

WRIGLEYS 5 SUGARLESS

WRIGLEYS ECLIPSE SUGARLESS

0 50 100 150 200 250

Latest 52 Weeks Ending Jul 10, 2011Dollar Sales US$ Million

TOTAL U.S. - DRUG TOTAL U.S. - FOOD TOTAL U.S. - F/D/Mx

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ANALYSIS Top Brands are sugarless gum category

in Food, Drug & FDM x Nutritional Benefits 37% of total sales are Incremental Sales Constant Innovation Convenience & Value Brand Loyalty & Packaging

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PRICING OVERVIEW - 200916

PRICING OVERVIEW - 201017

HOW EFFECTIVE WERE THE PROMOTIONAL ACTIVITIES?

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PROMOTIONAL OVERVIEW

Base dollar sales decreased by 1.6% compared to year ago.

Incremental sales increased by 3.5%

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BASE SALES Base $ sales decreased by 1.6%

compared to year ago.

ACV weighted distribution =100% Weighted average base price: One

standard volume of gum is priced approximately at 43 cents during the non promotion period. No change from year ago.

Sales per million $ ACV has decreased by $385

An average sized store size selling gum stocks 157 units of gum reduced by 2 items compared to year ago

CONCLUSION: The marginal decrease in base sales may be attributed to a decrease in sales velocity and a small decrease in average items per store

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INCREMENTAL SALES 8.5 % of total sales was contributed by total promotional activities. 17.6% any feature , 36.7 % any display, 3.7% feature and display, 42%

price reduction %ACV figures for the promoted stores increased by 0.1%. 36.7% of total volume sold is the incremental volume sold due to

promotional activities. Note that feature & display together contribute 60% of this incremental volume.

On display for 46 weeks.

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EFFECT OF PROMOTIONS ON PRICE

$1.00$1.05$1.10$1.15$1.20$1.25$1.30$1.35$1.40$1.45

C alendar Y ear 2008E nding 28th Dec

2008

C alendar Y ear 2009E nding 27th Dec

2009

C alendar Y ear 2010E nding 26th Dec

2010

B uilding C alendarY ear 2011 E nding

25th Dec 2011

Averag e price per unit (total)

Averag e price per unit - Any P riceR eductionAverag e price per unit - Any F eature

Averag e price per unit - Any Display

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SEASONALITY23

CONCLUSION Food market drives the category Top performing brand is Orbit Sugarless

Gum Wrigleys Eclipse is a premium brand as

per price/unit Price Reduction is most effective

promotional measure The volume per unit has increased over

a period of time

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Questions?

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Thank You.DivyaSruthiKusumDinesh

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