WRIGLEY HOPES GUM-CHEWING HABIT WILL STICK IN ASIAN MARKET

WRIGLEY HOPES GUM-CHEWING HABIT WILL STICK IN ASIAN MARKET

Will gum chewing, a staple for American kids and the bane of school teachers and floor-cleaners everywhere, take off in relatively gum-free places such as China, India and Vietnam?

Wrigley thinks so.Wm. Wrigley Jr. Co., whose name is synonymous with chewing gum, already is selling Double Mint and Juicy Fruit in more than 120 countries outside the United States.

In fact, the Chicago-based company gets a little more than 50 percent its sales volume from international markets. By the year 2000, Wrigley expects to reap about 60 percent of its sales volume from overseas.

Wrigley, with sales of $1.66 billion in 1994, believes the potential for chewing gum is big where consumption is now very small.

For example, chewing-gum consumption per capita in China is not even measurable, said William Piet, vice president of corporate affairs for Wrigley. By comparison, in the slow-growing U.S. market, per capita consumption is 195 sticks annually.

"It doesn't take much in the way of increased consumption (internationally) to really build your business," Mr. Piet said. "That's why we see the international business becoming a much larger portion of our business by the year 2000."

"Growth most definitely is coming from overseas," added Michael Branca, an analyst for NatWest Securities.

For the long-term, Mr. Branca said Wrigley's international sales growth is supposed to climb by more than 10 percent a year. In the United States, sales growth is expected to average about 3 percent as Wrigley continues to take market share from competitors.

However, in the first six months of 1995, international sales volume grew only about 5 percent as Wrigley focused on new marketing and distribution arrangements instead of tackling additional markets.

Among Wrigley's newest markets is Vietnam, which it entered recently after trade ties with the United States were re-established.

Wrigley supplies Vietnam with gum made in the Philippines while some distributors from China also ship product into the country.

Wrigley also is eyeing the potentially massive Indian market, where it hopes to convert consumers from betel nuts to chewing gum. The nuts come from palm plants and are chewed like gum, sometimes with lime and leaves of the plant.

Mr. Piet admits that India remains a bit of a gamble because of government regulations regarding some products.

"The Indian consumer does chew for both breath-freshening and relaxation," Mr. Piet said.

Wrigley also is expanding its longstanding presence in China beyond just the major coastal cities.

"Wrigley has been advertised along the Yangtze River since before World War II," Mr. Piet said.

As its international business grows, Wrigley likely will build new product plants in addition to the 13 it has outside the United States.

"We're looking at capital expenditures to stay pretty much where they are for the next few years at over $100 million," Mr. Piet said. "That seems to indicate at least some new or increased production."