Low-carb and sugar-free candy are breathing new life into the confectionery category, attracting new shoppers in droves.
Diet candy sales in the drug channel have skyrocketed to $81 million, up 67 percent from the year-ago period, according to Information Resources Inc. data for the 52 weeks ended Dec. 28. While the segment represents only 4 percent of total candy and gum sales in drug stores, diet candy generated $48.5 million in incremental new business for the overall category, a measure much more significant than its relatively small share.
And the momentum continues to build as increasingly more Americans take on the low-carb lifestyle. While there is no question that the rising number of people diagnosed with diabetes is playing a role in the growth, low-carb weight-loss plans are a much larger factor. The number of people on low-carb diets is expected to triple by 2006.
That growth is reflected in the IRI numbers. For the 12 weeks ended Dec. 28, diet candy sales were up 77 percent in drug stores.
"Retail drug chains have planogrammed and accepted more sugar-free items in the category compared with the competition," said Jim Corcoran, vice president of trade relations for the National Confectioners Association. "The great thing about sugar-free and low-carb items is they are bringing new shoppers to the confectionery category. [Diet candy is] a mature category that is evolving to meet consumer demand."
Hershey, Russell Stover and Masterfoods USA (M&M/Mars) are among the companies continuing to invest in new growth platforms to capture low-carb and sugar-free consumers.
Hershey president and chief executive officer Richard H. Lenny said Hershey this month would extend its sugar-free line to include York Peppermint Patties. Also this month, Hershey completed the rollout of its 1-Gram Sugar Carb line.
In mid-June, Nestle will begin shipping its new sugar-free offering: the Nestle Crunch Sugar-Free Carb Select bar.
Russell Stover's new line of low-carb and sugar-free candy is displayed prominently on end-caps this Easter season, with its sugar-free line encompassing more than 30 varieties. According to IRI, the candy maker has the No. 1 spot in the diet candy category, followed by Hershey s, Sweet N Low, Reese's and Cream Savers.
Sugar-free, low-carb Sinfully Delicious dessert bites also are working their way into the diet candy mix. May's Drug Stores saw a surge in sales of the dessert replacement after a consumer mentioned it at a Weight Watchers meeting in a Tulsa, Ariz., suburb, said John Arundell, May's food/candy/beverage buyer.
Armand Hammer, president and chief executive officer of Innovative Candy Concepts, maker of Sinfully or the year ended Dec. Delicious, said he sees sugar-free products edging out traditional offerings. "I think if you look out four or five years from now, when you go into a drug store, you 11 see a candy rack. You won't see anything about low-carb or sugar-free because, most of the products on the rack will be sugar-free.
Still, that seems a bit far-fetched. While low-carb/sugar-free is a trend that is gaining momentum, traditional candy and gum category sales show no signs of slowing. IRI data showed the category hit $2 billion, up 4.4 percent in drug stores, for the 52 weeks ended Dec. 28, with Snickers remaining the No. 1 selling candy bar.
Snickers' maker, Masterfoods USA, also is looking to add sugar-free products to its portfolio. "As we solidify plans, and we will shortly, we will release more details," said Jeffrey Moran, Masterfoods USA spokesman.
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