Wm. Wrigley Jr. Company - Company Profile, Information, Business Description, History, Background Information on Wm. Wrigley Jr. Company



410 North Michigan Avenue
Chicago, Illinois 60611
U.S.A.

History of Wm. Wrigley Jr. Company

The Wm. Wrigley Jr. Company controls almost half the market for chewing gum in the United States. For nearly 90 years the company has maintained a narrow brand line, consisting mainly of Wrigley's Spearmint, Juicy Fruit, and Doublemint gum, promoting these brands with extremely wholesome images. In recent years the company has introduced a wider variety of flavors, but has resisted the urge to diversify into products other than chewing gum. As a result, to many, the name Wrigley means chewing gum.

William Wrigley Jr. (who never used a comma in his name) began his career in business as a mischievous teenager in Philadelphia during the 1870s. After running away from home at the age of 11 and suffering through repeated expulsions from school, the young Wrigley reportedly was told by his father after a pie throwing incident, "Your school life hasn't been a success. Let's see how work strikes you."

The elder Wrigley relegated his son to work in his soap factory, giving him the job of stirring the soap vats with a large paddle. Working ten hours a day, the boy was paid only $1.50 per week. After serving a year as a soap stirrer, Wrigley won a promotion to the sales staff. Still in his teens, the junior Wrigley drove a horse-drawn wagon loaded with soap through the crowded metropolises of the northeastern United States. Peddling soap, Wrigley soon learned the importance of gentle persuasion. He learned to make friends through kind, deferential conversation and, in the process, move tons of soap.

In 1891, at the age of 29, Wrigley moved to Chicago to establish a western agency for his father's soap business. The product, however, was shunned by local merchants who complained that, priced at only five cents per box, the soap provided them with almost no profit margin. Wrigley convinced his father to double the retail price of the soap and induce sales through premiums. Wrigley purchased 65,000 cheap red umbrellas to give away with soap purchases. While the dye in the umbrellas ran when it rained, the devices succeeded in selling a lot of soap. And, while the concept required some fine tuning, the experience confirmed to Wrigley that premiums were a good idea and an effective sales aid. "Everybody likes something extra, for nothing," he once said.

At this point Wrigley decided to strike out on his own as an independent soap wholesaler. He chose to give away baking powder as a premium and, oddly, promoted soap sales with a cookbook. Before long, demand for the baking powder outstripped demand for the soap. In 1892 Wrigley abandoned the soap business altogether to concentrate on selling baking powder. But, tiring of the business, he chose not to offer soap as the premium for baking powder. Instead, he began to search for a new premium. Wrigley probably first saw chewing gum as a young soap peddler. Long in existence, gum extracted from spruce bark had been used by Native Americans as a relaxing and habit-forming pastime.

Gum in the 1890s was still extracted from spruce gum and from paraffin, a tasteless and odorless waxy petroleum product that refused to be chewed down. These primitive gums could hold flavoring agents, such as licorice extracts, but became tasteless globs after only a few minutes of energetic chewing. At the time, only about a dozen gum companies existed. After conducting some research, Wrigley suggested to his supplier, Zeno Manufacturing, that it try making gum with chicle, a coagulated latex extract from tropical sapodilla trees. Until this time, chicle was used primarily in the manufacture of rubber.

As with the soap before it, demand for the new chicle-based "chewing candy" outstripped demand for the baking powder. In 1909 Wrigley bought out Zeno and merged the two companies into the Wm. Wrigley Jr. Company. The new company introduced two new brands to the market. The brand Vassar was targeted to women, while Lotta Gum was intended for the general market. In 1893 the company rolled out Wrigley's Spearmint, a cool minty gum that freshened the breath, and later that year introduced a sweeter fruit flavored gum called Juicy Fruit.

Juicy Fruit, first packaged in a pale grey wrapper with red lettering (the distinctive yellow package did not appear until after World War II), stood out from other brands, and the fruit extracts used in Juicy Fruit held their flavor in the chicle gum. Wrigley's Spearmint, meanwhile, was wrapped in a solid white package. Both brands, wrapped five sticks to a package, featured a design that clearly identified the gums as a Wrigley product. And both brands proved so popular that Wrigley soon found no reason to continue manufacturing Vassar or Lotta Gum.

In 1899 Wrigley was invited to join six other chewing gum manufacturers who were banding together to form a trust. He refused, and soon found himself engaged in a nearly ruinous competition with them. As he himself was once a wholesaler, Wrigley understood the importance of supporting his retailers. Convinced that he could extend the application of premiums to dealers, Wrigley gave them free coffee grinders, cash registers, scales, lamps and other appliances. Having won their respect, if not their allegiance, Wrigley found it that much easier to foist Wrigley display cases upon retailers. But, despite his best efforts, sales remained flat. He gambled on two expensive, but ineffective, advertising campaigns--each costing in excess of $100,000--and when even these had no effect, he was left broke.

The financial panic of 1907, a drawn-out recessionary crisis that largely evaporated the demand for advertising, presented Wrigley with another opportunity to gamble. Still broke but finding advertising rates deeply discounted, Wrigley borrowed $250,000 and in three days purchased advertising space that would otherwise have cost him $1.5 million. This scale of advertising, he reasoned, would cause a reaction among consumers.

Striking quickly, with his competitors still shy from the recession, Wrigley timed his advertising campaign to run concurrent with a new dealer promotion. He sent retailers coupons for free boxes of Wrigley's Spearmint, redeemable from Wrigley distributors. When the dealers redeemed their coupons, they made themselves known to the distributors, who assembled a valuable list of retailers and methodically built relationships with them. Wrigley implored his salesmen always to be pleasant, patient, and on time, and never to argue.

In advertising, his now famous credo was, "Tell 'em quick and tell 'em often." The simple messages of his campaign, and the complex strategy behind it, were highly successful. In a matter of weeks Wrigley had grown its market from the Midwest to the entire nation. By 1910, as sales increased from $170,000 to more than $3 million, Wrigley's Spearmint became the largest-selling brand in the nation.

Looking for additional markets, Wrigley turned its attention to other English-speaking foreign markets. In Great Britain, however, the practice of chewing gum was held in low esteem. In fact, it was viewed as a guttural habit every bit as distasteful as chewing tobacco. Instead, the company turned to other British dominions and established factories in Canada in 1910 and in Australia in 1915.



Wrigley maintained a few other minor brands of chewing gum, including Sweet 16, Licorice, Pepsin, Blood Orange, Pineapple, Banana, and Lemon Cream. But lacking the marketing muscle and, consequently, the popularity of the flagship brands, these flavors gradually were phased out. In 1914, fearing stagnation in the product line, Wrigley added a new peppermint flavor, Doublemint. Wrapped in a bold green package--but with a two headed arrow logo--the new brand has been touted as "double strength," "double good," and "double distilled."

To keep the Wrigley name in the public consciousness, Wrigley bought huge public billboards, upon which he plastered his simple advertising messages: "Doublemint, Double Good" and "Chew Juicy Fruit." After 1930 Doublemint was promoted consistently with twins, double images, and even a double-talking radio comedian. Wrigley sponsored the Lone Wolf radio show, and created a fictitious Indian tribe in which more than 100,000 children were members. And in one spectacular stunt, and possibly the birth of direct marketing, Wrigley mailed a complimentary four-stick package of gum to every household in the United States with a telephone. People with telephones, he reasoned, could afford gum. These activities helped to sustain Wrigley's gum as established national brands. They also made him very rich, particularly after taking the company public in 1919.

With his profits, Wrigley purchased a share in the Chicago Cubs baseball team in 1916 and, after buying out his partners' interests in the team, collected the talent needed to win the pennant in 1929. Before his death in 1932, and with astounding foresight, he purchased Catalina Island near Los Angeles and developed it into a major tourist attraction. These endeavors helped to keep the Wrigley family in good financial health through the difficult years of the Great Depression.

As the economy slowly recovered from the hardships of the crisis, Wrigley maintained its strong position in the market under the leadership of Wrigley's only son, Philip K. Wrigley. The company made headway into the British market, establishing a factory there in 1927 and introducing a pellet-shaped brand of gum. Called P.K, the brand was named for the company's slogan, "Packed tight, Kept right," not for Philip Wrigley's initials as many had claimed.

The company, however, entered a potentially disastrous era as the United States escalated its involvement in the war in Europe. After the Japanese bombing on Pearl Harbor, the company found shipping unavailable and quality ingredients in increasingly short supply. Production of all three brands of gum had to be severely scaled back, and then all that could be manufactured was sent to the armed forces, whose use of the gum reportedly helped to relax and revitalize them.

Left only with inferior ingredients, the company in 1944 introduced a temporary brand called Orbit. Admitting that the brand was not up to its standards, Wrigley was secure in the knowledge that Orbit would disappear when the company could again sell its premium brands. To avoid confusion or consumer dissatisfaction, Wrigley gave the new gum an entirely different package design that did not include the trademark arrow.

Soon, however, Wrigley found it impossible to produce its premium brands even for the military. For the remainder of the war, the company produced only Orbit, but continued to advertise its regular brands. In billboard and print advertisements, the company featured an empty Wrigley's Spearmint wrapper with the caption, "Remember this wrapper!" The campaign was so successful that when the war ended and the brands were reintroduced (and production of Orbit ceased), pent up demand caused consumption of Wrigley's Spearmint, Doublemint, and Juicy Fruit to exceed prewar levels.

Dedicated to maintaining the value of the company's brands to consumers, Wrigley insisted that the price of the product be held at five cents per package. This was in keeping with William Wrigley's business credo that restraint in regard to immediate profits was not only the company's most profitable policy but probably the company's only profitable policy.

By holding the line against price increases, Wrigley built strong dealer confidence in his brands and held his raw materials suppliers to more stable terms. But this was only possible because the company dominated the market for chewing gum and was able to incorporate newer, more efficient production and distribution methods. In time, Wrigley's competitors were forced to raised the price of their products. This won the company even greater loyalty from retailers and convinced many consumers to abandon their brands for Wrigley.

In 1962, dissatisfied with low sales in Britain, Wrigley launched an educational advertising campaign aimed at ending the social prejudice against gum chewing. In an effort to illustrate circumstances in which gum chewing was not socially unacceptable, the company ran a series of advertisements over the tagline, "Certainly not!" The advertisements featured barristers, businessmen, and students in scenarios where gum chewing might offend others. The advertisements were taken so seriously by the British public that many wrote to the company demanding to know when and where they could chew gum. The campaign was altered to depict acceptable circumstances for using the product, and sales began to climb.

In 1971, after charging only five cents for his product for more than 50 years, Wrigley was no longer able to extract greater efficiency from its operation. Philip Wrigley was painfully aware of price sensitivity. His father often told his managers, "We are a five-cent business, and no one in this company can afford to forget it." And so, with great consternation but no alternatives, the company raised the price of its five-stick packages from five to seven cents. Inflationary pressures brought on by the oil crisis in the early 1970s inevitably forced the company to institute additional price increases in the years that followed.

By 1974 these price increases eroded the price advantage Wrigley brands held over competitors. Upstarts such as sugar-free Trident and cinnamon-flavored Dentyne began to win market share from Wrigley brands. To meet this competition, Wrigley introduced Freedent, which had the admirable quality of not sticking to dental work. In 1976 the company rolled out Big Red, a cinnamon gum slightly hotter and in a larger stick than Dentyne. Both new brands, the first in years, came in Wrigley-style packages.

In an attempt to stave off Trident and other popular sugar-free gums, Wrigley introduced its own sugar-free brand in 1977, giving it the World War II-era name Orbit. But after xylitol, the artificial sweetener used in Orbit, was declared carcinogenic, sales of Orbit plummeted and the brand was withdrawn. Also in 1977 Philip Wrigley died. His son, named William Wrigley, assumed leadership of the company after having served as president since 1961.

Under the new Wrigley, the company began an effort to win greater market share among teen and adolescent age groups and introduced Hubba Bubba in 1979. This gum, which boasted zeppelin-sized bubbles, encountered strong competition from Bubblicious and Bubble Yum, whose manufacturers outspent Wrigley on promotion. Amidst declining sales, Hubba Bubba was transferred to Amurol, a subsidiary of the Wrigley Company. But in the 1980s Wrigley found success with new products; the company re-entered the battle for sugar-free gum chewers in 1984 when it introduced Extra, a brand sweetened with aspartame that soon gave birth to its own extensions. Over a period of years, Extra became available in a half dozen flavors.

During the 1980s Wrigley returned to heavy television promotion of its brands using the single, simple slogan, "Pure chewing satisfaction." The message remained true to William Wrigley's "Tell 'em quick, tell 'em often" advice, and gave Wrigley a wholesome, super sweet image. This conservative approach was consistent with Wrigley's reputation for quality and purity. Still sensitive to the social stigma of chewing gum in public, the company did not portray people chewing gum in its advertisements until the 1980s, and for that it used a pair of attractive young female Doublemint twins.

The company's advertising agency, BBDO Chicago (located, incidentally, in the Wrigley Building), scored a relative coup with a new campaign launched in 1990. In a series of spots, Wrigley's Spearmint was positioned as an alternative to smoking in instances where smoking is not permitted. Using words such as "House Guest," "Office Policy" and "Frequent Flyer"--with the letters O and Q substituted with a red slashed circle over a cigarette--a voice-over explains, "When I can't smoke, I enjoy pure chewing satisfaction." The Wrigley advertisement broke new ground for addressing the sticky social question of smokers' and non-smokers' rights. While steering clear of judging the virtues of smoking, the advertisements suggested new ways people could use the company's product to solve a difficult situation.

While Wrigley brands have tended to carry a more staid image, the company maintained the strongest reputation in the market for quality and specialty. After more than 100 years in business, the company--now under the stewardship of the third William Wrigley--has made no attempt to diversify into different product lines. While Wrigley's Amurol subsidiary produces novelty and specialty confectionery products such as suckers and roll candy, the company has refused to venture into the food, consumer products, or chemical industries, where its major competitors, RJR Nabisco and Warner-Lambert, are most heavily concentrated.

Principal Subsidiaries: Amurol Products Company; Four-Ten Corporation; L.A. Dreyfus Company; Northwestern Flavors, Inc.; The Wrigley Company Pty., Limited (Australia); Wrigley Austria Ges.m.b.H.; Wrigley Canada Inc.; Wrigley Chewing Gum Company Ltd. (China); The Wrigley Company Limited (U.K.); Oy Wrigley Scandinavia Ab (Finland); Wrigley S.A. (France); Wrigley G.m.b.H (Germany); Wrigley N.V. (Holland); The Wrigley Company (H.K.) Limited (Hong Kong); Wrigley Hungaria Ltd. (Hungary); Wrigley & Company, Ltd., Japan; The Wrigley Company (East Africa) Limited (Kenya); The Wrigley Company (Malaysia) Sdn. Bhd.; The Wrigley Company (N.Z.) Limited (New Zealand); Wrigley Scandinavia AS (Norway); The Wrigley Company (P.N.G.) Pty. Ltd. (Papua New Guinea); Wrigley Philippines, Inc.; Malayan Guttas Private Limited (Singapore); Wrigley Co., S.A. (Canary Islands); Wrigley Scandinavia AB (Sweden); Wrigley Taiwan Limited; Wrigley Ljubljana Ltd. (Slovenia); Wrigley Czechoslovakia, Ltd. (Prague, Czech Republic); Wrigley Poland, Limited (Poland).

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