Sugar-free new-flavor profiles appeal to consumers' sweet tooth

Drug Store News, August 22, 2005 by Michelle L. Kirsche

Shopping drug stores for health-related items becomes at times a basket-filling conundrum as Americans play a tug-of-war of sorts between wellness and indulgence. To that end, retail sales of diet candy are expected to grow at an annual average rate of 25 percent through 2009, according to market researcher Packaged Facts. At that rate, the diet candy market could reach $1.3 billion within the next four years.

Drawing shoppers into the candy aisle are the newest artificial sweeteners that provide the flavor, texture and appearance that makes sugar-free, low-fat or fat-free candy not just palatable, but in some cases a downright tasty alternative for those on the quest to shed unwanted pounds. Candy makers also have come a long way in creating a more desirable taste profile from when the first sugar-free confectionery items made their way to retail shelves in the late 1970s.

Recently, however, candy makers themselves are suffering the same yo-yo effects as the dieters they are targeting. Measured by SKUs introduced during a given 12-month period, the number of diet candy introductions shot up from 99 for the year ended in March 2001 to 265 for the year ended in March 2003, but then dipped to 231 as of March of this year, according to a new report from Packaged Facts.

Marketers also are beginning to target kids, with 15 new products introduced over the past two years aimed at the youth market. The rise in incidence of type 2 diabetes in kids and teens no doubt has led candy makers to introduce diet-friendly candy that still appeals to a youthful palate. One example of the lengths manufacturers are going to appeal to kids who may be tracking blood glucose levels or battling the bulge includes Innovative Candy Concepts, which in mid-2004 relaunched its Too Tarts and Suck Up novelty lines with up to 60 percent fewer calories and no refined sugars.

For adults, no sugar still dominates new product introductions, with 63 new diet candy products introduced between April 2004 and March of this year including a no-sugar tag. Low-carb products introduced during the same time frame numbered just 27, compared with low-calorie at 16 and no-carb at 14--a nod, perhaps, to consumers' shift away from low carb.

Today, Splenda takes top billing as the No. 1 calorie-free sweetener found in new diet candies. Packaged Facts reported that 54 diet candy products introduced over a five-year period ended in March 2005 were sweetened with Splenda; 38 were sweetened with acesulfame potassium; 19 were sweetened with aspartame (NutraSweet, Equal); and four were sweetened with saccharin (Sweet'N Low). The most popular fat substitute during the same time period was maltitol.

Thanks to sugar and fat substitutes, U.S. retail sales of diet candy, which includes chocolates and non-chocolates, hit $495 million last year, up 36 percent over 2003. The market's compound annual growth rate over the 2000-2004 period was estimated at 43 percent.

Russell Stover remains the undisputed champion, capturing 37 percent of diet candy dollar sales in food/drug/mass during the first quarter of the year. Hershey followed with 14.4 percent, then Atkins Nutritionals with 12.1 percent, Kraft Foods with 8.7 percent and the remainder from next-tier diet candy makers, including Carbolite Foods, Nestle (which just introduced a sugar-free Baby Ruth), Simply Lite and Hillside Candy. With the acquisition of Kraft's confectionery business, Wrigley also may become a player in the diet candy market.

Masterfoods USA took a decidedly different stance on the much hyped chocolate health connection when it recently unveiled research showing that cocoa compounds called flavanols could help treat diabetes, strokes and vascular disease, findings that ultimately could lead to the study of a major new class of medications--or at least make people feel better about eating chocolate.