MARCH 30, 2006

Investing

By Pallavi Gogoi


Wrigley Chews Over Some Surprising News

Is Doublemint a health food? The company is setting up a new research institute to fund studies into the health benefits of chewing gum


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Chewing gum. There it sits at the checkout counter, a rainbow of alluring colors drawing the attention of waiting shoppers. Well, here's something to chew on the next time you consider the cornucopia at your local grocery store: Gum can help you lose weight, improve your memory, reduce stress, and whiten your teeth. Yes, all for as little as 25 cents.


Numerous studies have already shown the benefits of chewing gum. But the world's largest chewing gum maker, Wm. Wrigley Jr. (WWY), wants people to take such research more seriously.

RED BULL'S EXAMPLE.  On Mar. 29, it established the Wrigley Science Institute, which will fund significant research in all these areas. It will be headed by Gilbert A. Leveille, a former professor of food science and nutrition at Michigan State University who has worked in the food industry for many years.

"It's a smart move from Wrigley's perspective," says Lynn Dornblaser, an analyst at consumer research firm Mintel. "The key thing will be to come out of this process with some real substantive research that will show these benefits."

Wrigley is already pushing ahead. In 2006, it will fund 10 research studies in four areas -- weight management, stress relief, increased alertness and concentration. Wrigley execs are clearly driven by the pursuit of opportunity among people who are looking for a physical or mental edge. They've seen the Red Bull phenomenon. The energy drink, which helps people stay alert, has seen soaring growth and holds 80% of the market, despite being the most copied drink today.

KEEP ON FLOSSING.  While an energy gum would be a new area for Wrigley, it is already seeing growth in gum with extra attributes. Researcher Mintel says regular chewing gum sales are almost flat, but gum with added advantages has sky rocketed. In the last five years, sales of dental-whitening gum have increased a total of 285%.

And why not? More dentists have started recommending that patients chew gum after meals. Even the American Dental Assn. supports the claim that chewing gum is good for teeth and gums. "Saliva washes away plaque and bacteria in the teeth, and chewing gum gets the mouth to salivate," says Matthew Messina, a dentist in Cleveland, Ohio, who is also the consumer advisor for the American Dental Assn.

Messina warns, however, that gum with sugar will only feed the bacteria and cause more tooth decay. "Of course, that doesn't mean that gum is a substitute for brushing and flossing," he adds.

At least four studies in the U.S. and Britain have found that chewing gum helps people reduce weight. One such study in 2000 was conducted by the Mayo Clinic in Rochester, Minn. and showed that chewing sugar-free gum could help a person lose up to 11 pounds of extra weight each year. The results were published in the New England Journal of Medicine.

STRESS REDUCER.  Other studies show that chewing gum activates certain chemicals in the brain that help improve short- and long-term memory, and even helps reduce stress. For instance, when England's University of Northumbria in Newcastle, conducted a study on 75 adults, the researchers found that people who chewed throughout tests of both long-term and short-term memory produced significantly better scores than those who didn't.

Wrigley hasn't aggressively promoted any of these studies, largely because most were inconclusive or hadn't been peer-reviewed. It hopes that the new studies will do just that -- inspire large-scale studies by respected scientists, who will be able to provide conclusive results. "If Wrigley finds that fairly independent researchers can conclusively prove these benefits, then it can be first to market with a really beneficial gum, which will really boost sales," says Mintel's Dornblaser.

Gogoi is a reporter for BusinessWeek Online in New York


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