This Major Grocery Company Is Discontinuing Two Gum Brands
During the pandemic, some foods and household items experienced massive increases in sales as consumer habits shifted—toilet paper and alcohol being major two examples. Unfortunately, other product categories have not been able to share in this success, and recent supply chain issues and food shortages have continued to add fuel to the fire.
In response, some stores and grocery companies have made the difficult decision to discontinue certain product offerings in order to focus more heavily on higher-performing markets. For instance, global snack food company Mondelez International announced on Tuesday plans to divest its gum business, which includes well-known brands Trident and Dentyne, in North America and areas of Europe. This news, covered by CNN, was shared at a Mondelez investor event and also mentioned in a recent press release from the corporation.
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Mondelez produces an extensive list of popular food brands including Chips Ahoy!, Oreo, Ritz, Triscuit, and Honey Maid, and reported net revenue in 2021 of $28.7 billion globally and $8.3 billion in North America alone. Despite these impressive numbers, gum sales have continued to be an area that is lagging behind, especially in developed markets such as the U.S.
With fewer in-person events and in-store shopping–a major opportunity for gum producers–gum popularity dropped at the start of the COVID-19 pandemic. Sales have since rebounded, however, Mondelez determined it was not in the company's best interest to continue its gum operation.
Instead, the company is turning its attention to other chocolate and baked snacks while it vets a buyer for its gum business–although there is no set timeline for the sale according to a spokesperson's statement to CNN Business.
"Mondelēz International is reshaping its portfolio, with a long-term vision to accelerate growth and generate 90% of revenue in chocolate and biscuits, including baked snacks," the company stated in its press release. "Chocolate and biscuits are attractive and historically durable categories in both developed and emerging markets, with significant headroom to increase penetration and per capita consumption."
Mondelez was also forthcoming about its plans to more aggressively push sales through digital platforms. The company's announcement stated its goals to invest over $1 billion in the coming years to become the "digital commerce snacks leader", and to increase its percentage of revenue from digital channels from 6% in 2021 up to 20% by 2030.
This isn't the only company to decide to trend this way. Trader Joe's recently announced its discontinuation of multiple pet food products and Chobani discontinued its new line of ultra-filtered dairy milk just months after it was released.