Big in Japan
Julian Ryall considers how the Japanese chewing gum market is evolving.
Japan’s confectionery manufacturers have a reputation for being creative in developing new product lines, and when it comes to bubble gum and chewing gum, companies will need all the innovation they can manage.
Domestic sales in the segment have been falling sharply. Total Japan-based sales of all kinds of gum came to €1.3bn in 2009, with chewing gum accounting for €1.21bn of that total and bubble gum a mere €54m, according to trade sources and national statistics compiled by Euromonitor International. The chewing gum component can be further broken down to €927m in sugar free gum and €284m in sugarised gum.
However, over the following five years there has been a gradual but constant decline in consumption, with total Japanese gum sales tumbling to €997m in 2014, a fall of €267m. Chewing gum accounted for €959m of the total, with bubble gum sales contracting to €37m, according to Euromonitor statistics.
The outlook for the sector is similarly uncertain, with total sales predicted by Euromonitor to shrink to €955m in 2015 and as low as €892m by 2018.
“Although gum used to be popular among young consumers, they are migrating to power mints, which are fortified with xylitol and have a strong mint flavour,” Yuiko Mitani, a research associate specialising in the sector for Euromonitor, tells Confectionery Production.
“Since these products are marketed as breath fresheners and for keeping the consumer awake, they effectively have the same functions as gums,” she adds.
Consumer preferences
And while a key feature of gum used to be that it stays in the mouth for a long time, consumers’ preferences are shifting to confectionery that can be consumed quickly such as chews.
Gum has another significant drawback in Japan, points out Mitani: “One of the key weaknesses of gum is that while chewing it has the benefits of stimulating the brain and improving concentration for performing work, chewing gum in front of other people is often perceived as impolite in Japanese society,” she says.
Research conducted by Mondelēz Japan revealed that chewing gum is seen as ‘problematic’ by at least 30 per cent of workplaces in Japan as it gives the impression of being impolite.
“Many Japanese people are very conscious about being polite, especially at work,” says Mitani. “As a result, many Japanese people avoid chewing gum when they are with other people, especially at work and school.”
Japanese and South Korean food giant Lotte Co dominates the Japanese gum market; its xylitol product is the leading brand.
Lotte accounts for close to 50 per cent of domestic chewing and bubble gum sales, with its Black Black and Acuo gums rounding out the top five products. Clorets, marketed by the local arm of US-based Mondelēz International Inc, is the second best seller.
Meiji Seika Kaisha has about 12 per cent of the market and its Xylish range is third in terms of total annual sales, while Ezaki Glico Co has about a 10 per cent share of the market.
However, those companies’ declining sales are not unique to Japan, according to Daniel Bone, director of consumer insights at Datamonitor.
“I don’t see this as being a country specific challenge; it’s an issue across markets. People chew gum for a variety of reasons. Chewers are looking for unique and enjoyable gums that will excite them as well as provide ‘social currency’ among their peers.
“Chewing gum has become more than just a breath freshener as consumers demand better-for-you treats across the range of snacking categories,” he adds, stressing that consumers in all developed markets are becoming increasingly demanding in terms of their gum purchases.
This is driving innovation, but in the short term at least, it is making life harder for Japanese manufacturers, especially when it comes to attracting sales among increasingly picky consumers: ”Indeed, consumers’ diverse nutritional needs and shifting approaches to healthy eating are evident in ever-more sophisticated functional chewing gums.”
For example, for Japanese consumers, breath freshening remains a key requirement of their gum purchases, with Lotte releasing a new line into its Acuo brand in 2013 that eliminates unpleasant odours after a person has been smoking, a move that Meiji emulated with an addition to its Xylish brand that claims to solve the problem of bad breath after a meal.
Widening appeal
Conscious of the growing population of elderly consumers in Japan, Lotte is also promoting its Free Zone and Ha Ni Kuttsukinikui Xylitol – which literally translates as “Xylitol that does not easily stick to teeth” – among older people with false teeth, who are of key importance given Japan’s ageing consumer base.
The company also revitalised its long-established Green Gum and Cool Mint brands in 2014 – for the first time in 57 years – by making them sugar free and lightening the colours of the packaging to emphasise their freshness and a sense of ‘youthfulness’, according to Lotte marketing statements.
The company has also been using cartoon characters to help sell products to younger consumers. It included characters from Scandinavian cartoon the Moomins on Xylitol canisters from September 2014, while Japan’s Pokemon characters appeared on packaging in August 2014.
Looking particularly at the Japanese market, Bone says: ”Of most importance is that today’s chewers have higher expectations of quality and sensory stimulation. In the search for that special something, they expect variety. As a result, flavour innovation – such as using exotic fruits or spices, floral flavours or unique combinations – is arguably the biggest trend in chewing gum.
“Producers are focusing on innovation that brings the chewing experience back to pure enjoyment,” he says. “This is being seen through unexpected flavours, new textures and challenging the idea of when gum should be chewed,” he explains.
New concepts
Indeed, products that incorporate new concepts, whether that is new tastes, textures or longer lasting flavours, such as Lotte’s Magiq Lime Chip and Apple Gum, which changes flavour from lime to apple and ends with mint, are consistently popular in novelty conscious Japan.
The product is packaged in a flexible paper and contains what the company describes as ‘magic chips’ that release an ingredient that pops when it is chewed.
Meiji’s Fusso brand incorporates green tea fluorine, comes in grape or soda mint flavours, and the company claims the fluorine content makes it good for consumers’ teeth.
Mondelēz Japan is also shaking up its offerings in the local market, adding packets and canisters of Lime Mint and Berry Mint to its Recaldent line. In a link-up with Disney, the manufacturer has also redesigned the packaging of its Recaldent Kids gum with the addition of images from the film Frozen.
In September 2014, it added a new white mint flavour to its Recaldent range and conducted an aggressive television advertising campaign featuring popular Japanese actress Yuko Takeuchi and an Australian researcher with a focus on bad teeth – Dr Eric Reynolds, a dental research scientist at the University of Melbourne. Analysts say the campaign has been effective in emphasising the taste of the gum as well as its ability to strengthen teeth. The popular Clorets range – celebrating its 30th year in Japan in 2015 – has also been given a marketing makeover.
Conclusion
New products are generally unleashed on the Japanese market every two or three years, according to analysts, although a great deal of effort in the interim goes into brand repositioning.
”Chewing gum remains an image driven category, where younger consumers identify with the brand values on a more personal level; they are drawn to those brands they can positively relate to, and feel proud to be associated with,” says Datamonitor analyst Bone. ”Similarly, an unattractive brand personality creates a negative first impression. Lifestyle oriented gum brands are doing more innovative things to engage consumers – especially experimental 25-34 year olds.”
New gum bases are emerging as a means of releasing a range of active functional ingredients, such as vitamins, minerals, herbal extracts, antioxidants and caffeine, points out Bone.
”Gum is a convenient medium for delivering these benefits by enabling a relatively long shelf life for functional ingredients without the need for refrigeration,” he adds.
”The most health minded consumers now understand that product format can also play a key role in enhancing bioavailability and therefore outcomes and efficacy.”
For instance, Xylitol benefits from being the only gum brand in Japan that is accredited by the Japan
Dental Association (Nihon Shika Ishikai) for reinforcing remineralisation of teeth, while customers also like the fact that it comes in a wide range of flavours, including black peppermint, peach and ‘cool herb’ (similar to spearmint).
And while such innovation shows that Japanese chewing gum companies are diversifying to seize more market share in a shrinking market, the fact remains that marketing strategies can also succeed when they promote familiarity and simplicity.
Meiji seems especially aware of this. Its Xylish range has been cut back from 25 flavours in 2011 to four core mint flavours today – crystal mint, hyper cool, deep mint and relax mint – as well as an assorted fruit selection.
”The appeal of simplicity spurs demand for simple and familiar products and flavours, while convenient and affordable impulse gums appeal to on the go consumers,” notes Bone, who stresses that value-consciousness in economies that continue to struggle, such as Japan’s, will remain a key issue for gum manufacturers.
”All of these mega-trend themes continue to evolve against the backdrop of enduring value consciousness among recession weary consumers who have become conditioned to optimise the ’bang for their buck‘,” he concludes.
