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Issue Date: Vol. 50, No. 4, April 2010, Posted On: 4/1/2010


SOMETHING TO CHEW ON: Ball Gum Remains Leader As Bulk Vending Sales Champion


Hank Schlesinger
swag@earthlink.net
gumball vending, gum ball, ball gum, gum ball vending machine, bulk vending, vending machine, vending machine business, Gumballs.com, Ford Gum, Don Goletz, Vendomatic, Nancy Lucas, Smiles Exchange, vending machine operator

Gumballs"Even as other segments of the bulk vending industry endured a difficult year, ball gum held its own in terms of sales. The perennial bulk vending favorite continued to enjoy strong volume, leaving little doubt that the classic gumball is still the core of the industry. Although not yielding the high net profit of a hitcapsuled product or flat vendible, the steady revenue generated by gumballs has provided much-needed positive news in what some have called an otherwise "dismal" year for the bulk industry.

"Ball gum products are still the most valued items in the industry," said Tootsie Roll Industries president Ellen Gordon. "They are most profitable items vendors can carry." The 118-year-old candymaker acquired Dubble Bubble gum in 2003.

According to company officials at the online supplier Gumballs.com (Bozeman, MT), sales actually have been been picking up over the past 18 months. This increase, according to the company spokesman, is particularly dramatic in the new-business segment. Specifically, the firm has seen gains in sales to mom-and-pop operators just getting into the bulk vending business.

Not surprisingly, the favorite gumball size among newcomers and veterans alike is the familiar 850-ct. format. "The 850 count continues to be the mainstay," said George Stege of Ford Gum & Machine (Akron, NY). "Our bestsellers are still 850-ct. standard, seven colors and flavors. It's doing very well and has actually gained in sales – almost all our gains are there. After that, it's 1,080 count with the more intense flavors." The 850-ct. format typically is about an inch in diameter; 1,080-ct. gum is a bit smaller (23mm. compared with the nominal 25.4mm. diameter of the 1" size).

Stege also noted that his firm's Smarties line, a ball gum based on the popular wafer roll candy produced by Ce De Candy Inc. (Union Township, NJ) has also been gathering sales momentum. This is not surprising; licensed ball gum (and recognized brands in general) have been growth categories for several years.

Another trend Stege pointed to is the growing popularity of dietetic product. "Sugarless is also doing very well," he told VT. "Its sales are growing by double digits in retail." Although this trend has not caught on as strongly in the bulk vending arena, Stege said, sales of the sugarless gumballs are increasing.

If bulk-vended sugarless gum is trailing dietetic products' performance in traditional retail channels, it may be because the bulk industry is continuing its search for an adult audience. It may find one, too, as more operators expand into locations such as carwashes, parking garages, and office building and factory breakrooms.

THE EVOLVING GUMBALL

Operators, Stege added, are also experimenting with higher price points and smaller sizes. One development he noted is an increasing number of bulk operators charging 50¢ for premium 850-ct. ball gum, while other operators have maintained the long-standing quarter price-point after switching to the slightly smaller and less expensive 1,080-ct. product. Both moves, said the experts, were initiated to boost per-location profits. In some cases, this tactic was implemented in conjunction with a broader strategy that raised prices on both 1"- and 2" capsuled merchandise.

According to industry experts, both the higher price-points and the shift toward small-size gum have encountered only limited customer resistance in most markets. And the increased profitability has provided operators a straightforward way to offset decreased sales in locations presently experiencing reduced foot traffic.

According to Don Goletz of Vendomatic (Frederick, MD), his company has been marketing 1,080-ct. gum at a quarter vend for more than eight years, with continued success. "We do a lot of 1,080 at a quarter vend. In fact, the majority is 1,080 for us," he explained. "They are almost the same size, and we didn't see any change in the number of vends when we made the change."

Goletz, whose company's operation covers 17 states along the eastern seaboard, also stresses the need for variety. "I bet you we carry over 20 different gum flavors," he said. "We do a lot of malls, and you need variety in those locations. And just like toys, you need to rotate product. We try to rotate our gum regularly: not as often as our toys, but we do rotate our gum products. Our buyer ships different flavors every quarter, so the route drivers don't have a choice. It is hit and miss; sometimes a new flavor will really take off, sometimes it's the same. But rotating product makes a difference. We don't do it just for fun."

Nancy Lucas of Smile Exchange (Portland, CT) also recognizes the importance of rotating gum and confectionery products regularly, even for small operators. "I think when you put something new out there, it's always going to be an attention-getter for regular patrons," she pointed out.

"Remember, the employees in the location are a huge audience," said Lucas, who operates in mall locations throughout New England. She added that she regularly repositions machines on her mall carts to catch the eye of the regular customer. "I'll just change the position of the vending machine in the cart, and switch a product to give it more visibility," she explained. "I don't know how much impact it has, but I'm guessing it is different enough to attract the regulars."

Brand names are also hot, Lucas explained. "At the moment, my bestseller is the Nerds gumball from Oak Leaf Confections (Toronto). I keep the Nerds in, and then rotate through the watermelon, blueberry, and green apple flavors. But then I'll try something new, like lemonade flavor, and throw in strawberry shortcake or something else, too. And, of course, I'll get the new display cards that are noticeably different, to attract customers."

To feed this need for novelty, manufacturers continue to innovate. "New flavors and products generally spike sales," Tootsie Roll's Gordon said. "As with the entire confectionery industry, it is important to keep new products coming and to engage the consumer. This is especially important in bulk vending, with its younger consumers. And yes, there a couple of new flavors coming in 2010. Stay tuned!"

Gumballs also seem to be playing an active role in selling into locations, as they always have done. Since gumballs are familiar to almost everyone, they satisfy the "comfort level" of location managers and owners in a way that other, less familiar products may not. Thus, gumballs can open doors to new locations.

A recent trend identified by some suppliers, including Gumballs.com, is offering gumball colors to match the decor or corporate logo of the location. As proponents of this maneuver are quick to point out, color coordination rarely involves special orders from manufacturers or suppliers. With the wide variety of ball gum colors on the market, color matching can usually be accomplished with off-the-shelf products.

FILL ‘ER UP

Operators have also reported increased pursuit of so-called "filler locations." These small sites, conveniently situated between high-volume locations, almost always merchandise gumballs from small rack configurations of one or two bulk head units. Dry cleaning establishments, corner groceries and take-out food restaurants are typical filler locations, enjoying relatively steady foot traffic. They require minimal servicing while delivering a very welcome, if modest, revenue stream for many operators. In a rather bleak sign of the times, one operator reported that his filler locations are primarily equipped with machines pulled from locations that have closed. The way he sees it, it's better to have them out on location rather than stacked up in the warehouse, even if they aren't generating high-volume sales.

One thing that operators and suppliers agree on is that ball gum will remain a staple in bulk vending for the foreseeable future. Less clear is the role this traditional product category will play as the industry adapts to unforeseeable changes in the market. As manufacturers continue to come up with new flavors and even licensed merchandise, operators will need to make adjustments in order to market these new products more efficiently. After all, it was not long ago that the idea of rotating ball gum product would have seemed like a waste of the route driver's time and effort. Today, it is becoming common practice, as operators seek to maximize profits. No matter what changes the future brings, there can be little doubt that operators will find appropriate new ways to effectively market the favorite bulk vended treat.


Topic: Bulk Vending

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