Cadbury Schweppes yesterday confirmed it is to enter the UK chewing gum market with the launch of its Trident brand next year.
But shares in the company fell by around two per cent after it scrapped its profit margin target, saying it would underperform this year due to higher raw material costs and the summer heatwave melting sales.
Cadbury has been under pressure since a salmonella scare in June when more than a million Cadbury chocolate bars were taken off UK shelves. The firm agreed to recall seven of its most popular products after consultation with the Food Standards Agency.
Chief executive Todd Stitzer yesterday said the company was now aiming for "growth in operating margins over time".
The retailer had set a goal in 2003 to improve profitability by 0.5 to 0.75 per cent a year.
Mr Stitzer said: "We had ambitious targets, but also had unforeseen increases in commodity costs."
Cadbury said it would maintain its current revenue growth target of three to five per cent.
Mr Stitzer said Cadbury was looking forward to competing with Wrigley, which has more than 95 per cent market share in the UK.
Cadbury holds the number one gum share in many European countries including France, Spain and Greece with its Trident, Hollywood and Stimorol brands. Trident White is the number one whitening gum in the US, Canada and Mexico.
Trident grew by more than 20 per cent last year and is the world’s second largest chewing gum brand after Wrigley.
Cadbury Trebor Bassett managing director Simon Baldry said: "We see massive potential in the UK for Trident. The UK is one of the top ten gum markets in the world, but has seen little activity or innovation over the last few years. While confectionery markets around the world are seeing strong performances from gum, this has not been repeated in the UK, and we firmly believe our entry can only be good news.