CHICAGO — The grocery checkout is changing.
Casey Keller, Wm. Wrigley Jr. Co.'s president for North America, is focused on making sure the gum and candy maker swiftly adapts to the new ways consumers buy — whether online or in a self-checkout — while injecting new life into some iconic brands like Skittles, Starburst, Altoids and Life Savers.
The Chicago company, a subsidiary of Mars, is taking a closer look at how and why we buy impulse items at the checkout counter and how to sell more as shoppers go through the grocery lines faster, use self-checkouts with fewer options for those last-minute add-ons and buy more on websites like Amazon.com.
In brick-and-mortar stores, Wrigley is examining such things as the design of the checkout and how people line up to see where to place merchandise. It's adding display cases with LED lighting and more separation between the shelves and competing products to draw more attention. And in the world of e-commerce, it's testing new methods to lure shoppers into making more impulse purchases.
Keller recently sat down with the Chicago Tribune. This interview has been edited for length and clarity.
Q. What does the business look like now?
A. Our business right now is three things. No. 1 is gum. Sixty percent of our portfolio is gum. Thirty percent is what we call confections, so Skittles, Starburst, Life Savers. A little over 10 percent of our business is mints: Altoid mints and Life Savers mints.
Gum has been our turnaround business. And that's because the category before the last 12-18 months had been in a slow decline. Gum now is growing. It's basically a few fundamentals that we fixed. No. 1 is investing in advertising, so we're reminding people when they go to the checkouts that they should be buying gum.
Second thing is what I call fixing the core. I think we had been on a strategy in the category, not just Wrigley, of expanding varieties. You could get gum in any flavor. And the reality is, people largely chew mint gum and a little bit of fruit. As a category we had gone crazy.
We were making the shelf very confusing, making it hard to find what you really wanted.
Once we got back to that core, we said there are other parts of the gum category that we walked away from. In addition to the fruit or mint gum, there's also the fun or candy-like gum. A 12- or 13-year-old isn't walking around thinking they need fresh breath. They want fun and variance and flavor. So we got back to that business. Back to supporting Hubba Bubba, back to launching Juicy Fruit in new varieties, like new Juicy Fruit Starburst flavors, which has been a big win for us.
We whittled down all the things that weren't working and then we added new things to the core to make gum fun again, because honestly I think we forgot that gum should be fun.
Q. What are you working on now to bring Wrigley into the future?
A. We are investing in growth in our production facilities. We have a new building going up next to our Yorkville (Ill.) facility to accommodate a Skittles line. It's the first time we've made Skittles in that operation. We're building a new plant because we're out of capacity on Skittles. That's a $50 million investment, 75 new jobs out there in Yorkville …
We are also increasing our advertising investment. Our ad investment is up probably 35 percent in the last three years. So we're investing more in our big brands — Orbit, Five, Extra, Skittles, Starburst — and recently we put Juicy Fruit back on air.
The last thing is, we're doing a lot of investments in LED-lighted racks and what we call front-end or impulse technologies.
Q. How important are online sales in general to the business?
A. It's interesting because food purchases, which are most [comparable] to us, have not moved online in huge ways. It's probably about 1 or 2 percent [of all online purchases]. But I think you're going to see it continuing to grow, so it's something you have to pay attention to.
But I always tell people, the physical store is not going away. The best projection is that in 2020, 5 percent of food purchases will be online. And that's really the traditional thinking right now. So you're still going to be buying 95 percent of your food in the "traditional" retailer.
But we are investing a lot of money in e-commerce because we do believe that's going to become a much bigger channel in our future. So we're investing in infrastructure, platforms, investing in digital capabilities. We're building teams to go after business at Wal-Mart.com and Amazon.com.
Q. How are you creating impulse purchases online?
A. We've done a lot to work with Amazon and others, including Walmart.com, to see how do we sell gum and mints online and even testing a pilot of how we create impulse online.
The Amazon Dash button is an example. You have it in your house and when you're out of gum, you push it and it automatically puts gum into your cart.
We're also doing big business with Amazon in what they call subscription, or subscribe and save, which would be having regular replenishment of gum. Ship gum straight to their house and they don't have to think about it. So that's a great business for us, too. This is all part of the challenge.
Q. What's one of the biggest misconceptions about your business?
A. I think a lot of people in the consumer products industry are too quick to dismiss our categories as mature: There's not a lot of growth there, they're well developed, they're sold everywhere. But I don't believe that. I believe in the old saying, "There's no such thing as mature brands, just mature marketers."
If Steve Jobs hadn't thought about the Walkman differently, we would have never had the iPod. We have to think like that. … How do we reinvent who we are and grow in the future?