Niche Candymakers In Shadow Of Wrigley-Mars Deal

Chicago Tribune:

Henry Rich kept a low profile as he passed out samples of his top-selling mint mojito breath lozenges, but he knows Wm. Wrigley Jr. Co. is on the trail of his tiny business.

Wrigley recently launched a mint mojito flavor of its own, teaching a lesson in market power to the youthful Rich, who started the Oral Fixation candy company five years ago fresh out of Harvard University. “It was really a heartbreaker when they came out with that,” he said. “We’re the David. They’re the Goliath.”

The planned acquisition of mint-and-gum kingpin Wrigley by giant Mars Inc. promises to boost the clout of both companies, and potentially make life more difficult for would-be competitors. Their combined 28 percent share of the U.S. market would surpass Hershey Co.’s 24 percent as well as that of all other candymakers—Oral Fixation and its five employees included. “Now it’s a double Goliath,” Rich said.

Consolidation in the global confectionery business opens niche opportunities for small, nimble companies such as Oral Fixation, but only to a point, some marketing experts say.

When a category or brand develops momentum, the industry leaders notice. And with their growing distribution power and marketing leverage, the dominant players are capable of taking over almost any sliver of business that shows promise.

They dominate shelf space, cut promotional sales deals and shower value-added services on retail clients, noted Scott Davis, senior partner at Chicago’s Prophet Inc. “These bigger companies are set up in effect to call the shots,” he said. “If I’m one of these smaller guys, I’m concerned.”

Photo by Oral Fixation.

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