Eclipse. It also launched its Airwaves brand in various flavors across Europe in 2000. In the following year, Wrigley introduced the Surpass antacid gum during the spring season, and Orbit sugar-free tab chewing gum in the summer. The company diversified into candies( with the introduction of Orbit Drops) and mint markets in 2003. Wrigley became the world ' s largest manufacturer and marketer of chewing gum, with global sales of over $ 3 billion and presence in over 150 countries.
During the same period, Wrigley kept a close watch on international acquisitions crucial to their business growth and hence, spent much of the 1990s focused on moving into lucrative Asian and European markets. In 1992, the company opened a Chinese manufacturing facility in Guangzhou. During that year, international sales grew at a faster pace than the company ' s domestic sales and accounted for 45 percent of overall revenues. By 1993, construction plans were underway for plants in Bangalore, India, and in Poznan, Poland. The firm also began to expand and upgrade its existing facilities in England and France. Wrigley ' s international efforts proved to be a success. In 1994, international sales outpaced that of domestic sales, accounting for over half of the company ' s overall revenues for the first time in its history.
During 2003, the company was focused on six strategic goals: boosting its core business, expanding into new geographic and distribution areas, domestic diversification, product innovation, delivering high quality at a low cost, and developing a successful workforce. Wrigley ' s desire for major expansion left some industry observers questioning its strategy. On one hand, an acquisition could catapult the firm into the upper echelon of the food and candy industry. On the other hand, it could spell disaster for a traditionally conservative, family-run firm.
GLOBAL CONFECTIONERY MARKET IN 2003
Global confectionery trade was estimated to reach $ 17 billion in 2004, an increase of 8 % from $ 15.8 billion in the present year.( The projected numbers are shown in Exhibit 1 and 2). This growth could be attributed to the surge in demand for innovative sugar-type candy and gum, and premium chocolate products. Presently, chocolate confectionery accounted for over 60 % of sales of the confectionery industry by value. However in terms of sales volume, sugar confectionery held the majority share with 51 %. Volumes sales were expected to amount to over 17.8 million tons by 2010.
The major raw materials used in this industry included cocoa, sugar, nuts and milk. The United States was the largest producer of chocolate and most of the sugar-type candy by volume, followed by countries like Germany, the United Kingdom, France, Brazil and Japan. Recent developments in this industry indicated that production in the fully developed economies had stagnated, but investment in emerging economies still held a lot of opportunity.
The markets for confectionery products could be divided into two, namely- mature markets and emerging markets. Mature markets were those where consumption levels have been largely static in recent years, while emerging markets exhibited strong growth in consumption. Mature markets included Western Europe, North America, Australia, New Zealand and Japan while the emerging markets included Eastern Europe, Latin America, Asia, India, Africa and the Middle East. Sugar confectionery was in high demand in emerging markets while chocolate was the favorite of the mature markets. The expected growth rates in consumption were higher in the emerging markets than in mature markets, however, owing to the fact that the per capita consumption was higher in mature markets; the growth in mature markets could not be neglected.
The global confectionery market was also a highly fragmented one with no manufacturer accounting for more than 10 percent of the total confectionery sales. The major players in this market were Mars Inc., Wm. Wrigley Jr. Co., Nestle SA, Hershey Foods Corporation and Cadbury Schweppes Plc. Together, they held around 40 % of the market share.
There had been a demand for new flavors and varieties especially in chewing gums and mints sector. New product innovation thus remained critical to becoming successful in this industry, and hence many of the world ' s leading suppliers were investing heavily in this area.
INDIAN CONFECTIONERY MARKET
Since liberalization in 1991, the Indian economy had undergone a major overhaul. The confectionery sector had been witnessing major investments and entries by a large number of multi-national companies. However, growth had slowed down in the past couple of years and hence companies have tried offsetting this, either by broadening their consumer base from primarily children and teenagers to adults or tried to be more active in marketing to rural India, where penetration remained lower than the average for the country.
The Indian confectionery market, despite India ' s huge population was very small. Valued at close to US $ 450 million, it was estimated to be only 138,000 Million tonnes.( Refer to Exhibit 3 for the category-wise breakup).
Between 1998 and 2003, confectionery retail sales grew by more than 55 % in value terms and 46 % in volume terms, at an average annual rate of 9.5 % and 8 % respectively. There existed a clear trend of faster sales growth in value terms, indicating that consumers were
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