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Issue Date: Vol. 43, No. 11, November 2003, Posted On: 11/13/2003


Ball Gum Category Retains Strength; Product Diversity Sustains Growth


Hank Schlesinger
swag@earthlink.net

U.S.A. - Although ball gum remains a bulk vending staple, the past few years have seen significant changes in this timeless product category. The generic single head machine packed with a standard colorful assortment is quickly becoming more uncommon. Both operators and product and equipment manufacturers are seeking to maximize sales of this bulk standard with new flavors, delivery systems and marketing techniques.

These new approaches have accounted for a steady growth of ball gum and ball gum venders over the past few years. According to the 2003 Vending Times Census of the Industry, Ball Gum Venders (a category that also includes "chicle" and wrapped tab gum) showed a marked increase in machines on location from 2001 to 2002. The number of machines rose from 898,000 to 910,000. And, while the average annual volume per machine remained at a steady $115, the total dollar volume did increase from 2001's $103.27 million to $104.65 million in 2002.

Growth in machines and sales can be partly explained by the fact that ball gum remains not only a steady seller, but also provides the highest profit margin in the business. Operators seeking to maximize sales of this lucrative item have been aggressively seeking new ways to entice consumers.

Although some operators have been treating their ball gum as the drab consolation prize for young patrons unable to afford the more pricey purchase of 50 or a $1 capsuled marchandise, there is a growing number who are getting back to basics with new machines and offerings of wider product selections.

According to Phil Kalbaugh, Concord Confections' national sales manager for bulk vending, business in the ball gum arena is good. "We have seen an increase in business," he said, "and I'd have to attribute it to the new items , the new flavors in gums and candies that we're constantly introducing." Over the past several years, Kalbaugh explained, Concord has aggressively introduced new flavors and brands while reintroducing strong sellers that had been retired from the market. The company has also taken the vanguard in terms of branding. Among its branded items, "Dubble Bubble," the perennial favorite, continues to attract a new generation of chewers and bubble blowers.

By following this strategy, Concord has essentially de-commodified ball gum and candy. That is to say, where once all ball gum was created and marketed equally, Concord's strategy has provided brand awareness while offering operators more choices. Take, for instance, the firm's line of "Gourmet Gumballs." The phrase itself would have seemed an oxymoron not very many years ago. However, since its introduction several months ago, the brand has been met with widespread success, drawing in an older audience with its selection of exotic flavors and promise of "gourmet quality."

This wider selection, said Kalbaugh, has also provided operators with a powerful marketing tool. Operators can now "program" their gumball selections to match location demographics as well as cycle through different brands to maintain the appeal of the "new" to steady customers.

"Operators should be following their ball gum and candy products as carefully as capsule products," said Kalbaugh. "If you look at the past, assorted mixes of chicles and assorted mixes of ball gum were mainstays. They were a commodity. Today the operator has to be aware of what's selling in his area and he has to constantly renew his machines so people say, 'I haven't tried that.'"

This strategy, said Kalbaugh, is similar to the same one that operators employ when programming machines for capsuled items or flat vendibles. Few capsuled items or flat vend series are capable of sustaining sales over the course of eight or nine months. Ball gum is no exception. When changed out every three or four months, the lure of the new concept or untried flavor can serve to maintain high sales numbers.

"Everybody is constantly looking for new ideas and ways to improve the machines, so they have to be smarter," he said. "They have to constantly be re-thinking the products they are offering and see the vending machine as a retail unit , as a small store. That means paying attention to what is selling and not selling."

And, too, explained Kalbaugh, operators should be aware of the age demographic in any given location. "The universe for gum ranges from child to adult, so you have to program the machine since their tastes are different," he said. "For instance, if you have a lot of adult traffic you want to focus on adults, and if you have kids, you want to focus on kids. Our 'Dog Bonz' candy will probably not appeal to an adult, while a mint wouldn't be popular with kids. However, our 'Rascals' would probably appeal to both."

MACHINE DREAMS

If manufacturers of gumballs and other ball candy are offering operators an increasingly wide assortment of products, the delivery systems are also evolving into an ever-greater variety of formats. It is now possible to offer traditional bulk head , still the primary delivery system for gumballs , mounted to virtually every type of machine. An operator today can purchase flat vend units, spirals and other machines that feature the more traditional bulk head for ball gum.

These new machines seem to say: "Buying a sticker? Buy some gum! About to purchase a sticker or high-bounce ball? Buy some gum, too!" These hybrid machines are a significant innovation, since they provide consumers with the ball gum option in a compact package.

However, the real news is in the continued success of interactive venders. It is worth noting that there are now more varieties of pinball-type bulk venders available on the market than there are actual pinball machines. These units, which have enjoyed popularity in family fun centers, family restaurants and pizzerias, have become something of an industry standard in a surprisingly short amount of time.

Accepted by operators and locations alike, these interactive models are generally seen as the next evolutionary phase in a process that began with the spiral machines. The spirals, say the experts, added entertainment value along with the purchase of a gumball. Granted, watching a confection winding its way down from head to hopper was not exactly a thrill for many people, but the novelty of the devices and its continued ability to delight young patrons proved the point that new delivery systems were viable. And within a very short time these units changed the thinking of how operators and patrons define a gumball machine.

The next logical step, of course, was to move from value added through entertainment to value added from interactivity. With less than a decade between the introduction of the first spirals to the first interactives, these new machines found a wide audience.

The simple designs of these units have also begun to evolve as the interactive concept has taken root. For example, OK Manufacturing introduced its new "Soccer Ball" interactive unit during the AMOA International Expo. Based on the two-player table soccer or "foosball" concept, the vender , or more accurately "game" , allows two players to compete for the gumball with which they play.

According to OK Manufacturing product specialist Heidi Olsen-Hughey, the game not only provides a competitive challenge for the players, but also adds value to the gumball.

"The actual gumball isn't the full value anymore; in the situation where the vender is interactive, the entertainment offers the value and the gumball becomes the prize," explained Olsen-Hughey. "It increases the value of the gum, but you can't put a dollar amount on how much fun is."

These interactive machines also come with a significant benefit to the operator and locations. Whereas a purchase of a gumball is most often limited to a single vend, interactive machines are drawing repeat plays. "I think they are drawn to anything that gives them a sense of entertainment, accomplishment or the idea of winning," said Olsen-Hughey. "People are more competitive than ever before and with the soccer game you have repeat play. We've found that customers typically play more than one game."

IT'S A GUMBALL WORLD

If ball gum is maintaining its popularity in the U.S., some of its most significant growth is currently being seen overseas. According to Mahesh Pohoomull, Oak Leaf Confection's international export manager, ball gum is undergoing impressive growth around the world.

"Ball gum and candy is completely picking up overseas. The vending machine market internationally is nowhere near as mature as that in North America, so therefore there is opportunity for operators to enter," said Pohoomull. "And they have been doing so. But also there is more profit in gum and candy, so they are also switching to a gum and candy selection and away from other items."

Another factor Pohoomull points to is the increasingly strong euro that is making all American (and Canadian) imports more competitive. "The euro has gone from 90 to $1.19, which means a strengthening of their buying power and that's resulted in a lot of increase in our European business," he explained. "Right now we're aggressively building our distribution network throughout Europe, throughout Mexico and throughout Australia."

What accounts for this worldwide increase in bulk vending? Apparently operators around the world are being drawn to the field by the same factors that have brought generations of Americans into bulk vending: relatively modest start-up costs and a desire to build a business from the ground up. And, with ball gum still among the most profitable items available to the novice operator, it's not surprising that the modest gumball would garner international appeal.

RETHINKING THE GUMBALL

That the gumball is here to stay is without question. However, what is in question is how operators can best maximize profits from this industry staple. Long-time industry professionals point out that operators today have more options than ever before when it comes to marketing the profitable little spheres. Delivery systems in the form of unique venders, branded items, a constant updating of flavors and even sizes are all up for grabs.

"You can put a couple of heads of gumballs in front of the mom and pop and you might do okay with them," said one long-time operator. "But do you really want to do just 'okay?' Gumballs are like everything else, you have to put some thought into them in order to make any kind of money."

For some operators, this may mean a significant change from "business as usual," but for those willing and able to put in the time and the effort, the rewards associated with the effort will no doubt pay off handsomely.


Topic: Bulk Vending

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