William Wrigley Jr., founder of the largest chewing gum manufacturer Wm. Wrigley Jr. Company (shown above), provides another phenomenal example of an intelligent fanatic coming out stronger in a time of industry, and overall, stress.
The year was 1907. As we wrote in Intelligent Fanatics: Standing on the Shoulders of Giants, Mercantile National Bank president F. Augustus Heinze and brother Otto unsuccessfully cornered the copper market. Banks holding copper stocks as collateral became insolvent.
Anti-Fragility - Aggressive Conservativism
During the crisis most advertisers were tumbling over themselves to cancel their advertising contracts. They wanted to save any money they could. Included was American Chicle Company, the trust that at the time was dominating the chewing gum industry.
Wrigley’s gum company, on the other hand, had little money left to lose. He had lost about $200,000 in two expensive, ineffective advertising campaigns.
But now when competitors cowered, Wrigley saw opportunity.
Wrigley borrowed $250,000, a monumental sum, to buy more advertising. Most thought he had lost his mind making such a risky move. Hadn’t he failed enough with advertising already?
Actually, it wasn’t risky at all. It was the soundest decision he could have made.
Advertising rates had plummeted to shore up demand. Wrigley reasoned that with so much less competition in advertising it was an opportune time to act aggressively.
Wrigley used all of the proceeds of his loan to buy what normally would have cost him $1.5 million worth of advertising space.
The move couldn’t have be more conservative! Wrigley got cheap, high quality advertising space when no one was advertising. Essentially, he got to have his cake and eat it too.
That was not all. Wrigley simultaneously sent coupons for free boxes of Wrigley’s Spearmint to retailers, redeemable from Wrigley distributors. By making retailers go to distributors to redeem their free product, it made easier for distributors to establish and build relationships with a long list of retailers. Many retailers who previously wouldn’t have cared about Wrigley’s gum.
William Wrigley Jr.'s aggressive conservatism, or anti-fragility, established and built economic mind-share in the consumer. Sales went from $170,000 to $3 million by 1910. Today Wrigley Company, owned by Mars Inc., is the largest manufacturer and marketer of chewing gum worldwide.
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