• Ad Age, Friday, April 14, 2006 11:30 AM

In a surprising admission, Wm. Wrigley Jr. Co. CEO Bill Wrigley Jr. told investors that two of his brands, Altoids and Life Savers, are not being marketed properly. The brands, which Wrigley bought from Kraft last year for $1.5 billion, weren't being handled properly by their previous owners, either, Wrigley said, adding that the products had received "limited marketing and innovation support" and will require more significant investment than previously thought--at the expense of earnings--in order to grow. "When [Wrigley] bought the business, they saw a certain level of distribution and thought they could maintain it without extra marketing spending, but that distribution continued to deteriorate," said Credit Suisse analyst Rob Moskow. Lehman Bros. analyst Andrew Lazar surmised that Wrigley "was hesitant to invest aggressively behind these brands until it had a better sense of the innovation pipeline and had its own merchandising programs." But he said the aftermath of Kraft's underinvestment, coupled with the disruption of the transition to Wrigley's ownership, resulted in disastrous sales declines.

Read the whole story at Ad Age »