A Sugar-Free Rush
This is the fastest-growing candy category around, and
it presents a sweet opportunity at retail because sugar-free candy appeals to
several distinct consumer segments.
Sugar-free candy isn’t just for diabetics and
dieters any more. These two subsets of the population represent the core
target market, of course, given that more than half of American adults are
But market research suggests that there’s also
significant market development potential among that growing body of
consumers who have started thinking more about what they are putting into
their bodies — not because they’re ailing or on a diet, but
just because they’re generally health-conscious. Such consumers span
all age groups, but are concentrated in the 18- to 34-year-old segment of
the population, according to a research report titled “Sugar-Free
Food and Beverages” from Mintel International Group Limited.
Mintel concludes that there also is potential for
growth in sugar-free product consumption among teens, since not only are
they concerned about their appearance, but they also have substantial
discretionary income. Some vendors have even speculated that the market is
ripe for sugar-free novelty items for kids.
And, finally, many carb-counting consumers no doubt
will be drawn to these products because of their lower carbohydrate
absorption attributes. To woo this audience, marketers of sugar-free candy
must highlight carb content on product packaging.
According to Mintel’s research, slightly more
than one-third (34 percent) of consumers surveyed say they already are
regularly purchasing sugar-free foods. Clearly then, marketers of
sugar-free candy — both retailers and vendors — should ensure
that these products have a general
“fits-into-a-healthy-lifestyle” positioning and are marketed
not just as something people are buying because they have no other choice!
Managing this category is about to get more
challenging, however, since the sugar-free sales surge has triggered a
spate of new product introductions, which now are vying for a finite amount
of retail shelf space.
Some recommendations: Don’t duplicate sugar-free
product types or plan-o-gram double facings of any one SKU. Provide a good
assortment of sugar-free chocolates, hard candies and chewy products.
When selecting vendors, assess the company’s
commitment to the category for the long haul. Also, be sure to choose the
best-tasting products in order to improve the odds of long-term success.
Now may be the time to scrutinize price points as well. Historically,
margins have been higher than average for sugar-free candy because turns were
lower than average. But now sugar-free candy movement has dramatically accelerated,
which may provide the opportunity to trim margins a bit, thus making the products
even more appealing to shoppers.
In formulating sugar-free products, polyols or sugar
replacers including erythritol, isomalt, lactitol, maltitol, mannitol,
sorbitol and xylitol frequently are teamed with high-intensity sweeteners
such as acesulfame potassium, aspartame and sucralose. Sugar replacers are
used to add bulk to formulations, while high-intensity sweeteners, as their
name suggests, dial up the sweetness level.
The taste of sugar-free candy has improved
dramatically in recent years thanks to regulatory approval of new sweetener
options and formulators’ ability to perfect taste profiles by
blending various polyols and high-intensity sweeteners.
Perhaps the biggest issue in terms of formulation is
the fact that excessive consumption of some polyols can lead to unpleasant
gastrointestinal side effects, and vendors can be vague as to what exactly
constitutes “excessive consumption.” The good news for fans of
sugar-free foods is that most people adapt after a few days, in the same
way they do to high fiber foods.
But do expect that consumers of sugar-free foods will be astute
label readers. They may well seek out particular sweetener options that they
find the most palatable.
Because sugar-free sweets appeal to multiple consumer
segments, secondary displays can be a major sales boon. That’s
particularly true for retailers with in-store pharmacies. Position a
secondary display of sugar-free candy in locations adjacent to the pharmacy
department and the candy is likely to catch the attention of diabetics
and/or older shoppers, who tend to purchase prescriptions more frequently.
John Arundell, candy category manager for May’s Drug Stores
based in Tulsa, Okla., has a sugar-free candy display adjacent to the pharmacy
in his chain’s Drug Warehouse stores, as well as in the main candy aisle,
and he estimates that the two locations contribute about equally to total sales.
Recognizing that a regular consumer of sugar-free confections
probably won’t want to revert to the full-sugar versions simply because
the calendar says it’s a holiday, major players have introduced sugar-free
gift items. After all, for those truly concerned about the well being of the
recipient and close enough to know his or her preferences, it just makes sense
to provide a sugar-free option.
Many factors combine to bode well for strong growth in
the sugar-free confections market. Not the least of these is the fact that
sugar-free products taste better than ever thanks to product formulation
There’s also the fact that the U.S. population
is aging. According to Mintel’s report, the population segment
composed of 55- to 64-year-olds will be the fastest growing from 2003 out.
Older consumers are more likely to be diabetics, and aging baby boomers are
expected to be even more proactive about staying healthy and active than
From 2002 to 2007, Mintel forecasts 58 percent growth in sugar-free
candy sales at current price. So watch out: The sugar-free rush is on.
Create a sugar-free billboard.
Designating two feet, four feet or even more space
within the inline candy department makes it easy for consumers to find
their sugar-free favorites — or to experiment with something new. If
a brand is available in both a regular and a sugar-free formulation,
don’t confuse shoppers by positioning them side-by-side in the
It’s too easy for the shopper to inadvertently pick up the wrong product.
Give them a sign.
Once the sugar-free section is in place, incorporate signage above it in order
to further highlight the category.
Offer shoppers a taste.
Sugar-free candy is a product category that cries out for in-store
sampling because the uninitiated will most likely be pleasantly surprised
at how good it tastes!
Changemaker checkout counter displays are also a good idea.
They offer shoppers a low-risk, low-cost opportunity to check it out.
|2003 Dietetic Candy Sales and Promotional
vs. Year Ago
|Display $ volume
vs. Year Ago
|*In food, drug and mass merchandisers,
excluding Wal-Mart. Source: ACNielsen Strategic Planner