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02/06/2014

Natural growth

Theyre good for sweetening a cup of coffee or tea, but alternative sweeteners have seen some rather sour sales performance in recent times. According to data from Information Resources Inc., both private label sugar substitutes and the larger total category saw dollar and unit sales declines during the 52 weeks ending Dec. 1, 2013 (see the table, p. 60).

Alternative sweetener category performance
Source: IRI, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers (including Walmart), military commissaries and select club and dollar retail chains, for the 52 weeks ending Dec. 1, 2013.

However, retailers need not lose heart over this bleak news. David Rigg, senior director of marketing with Carmel, Ind.-based Heartland Food Products Group, believes retailers have a great opportunity to turn around sales of alternative sweeteners by focusing on the natural products side of the category.

\"While artificial sweeteners still hold 60 percent of total category sales, the gap between [the] artificial and natural sweetener segments will continue to narrow,\" he says. \"By 2015, the natural segment is expected to capture 37 percent of total category sales, while the artificial segment will drop to 53 percent.\"

Sweet spot for store brands
Looking specifically at store brands, sales of all-natural zero-calorie sweeteners are increasing quickly, Rigg adds, though consumer adoption took some time.

\"For example, private label stevia is growing at a rate of almost 35 percent versus 12.5 percent for national brands,\" he explains. \"Share of natural sweeteners for private label is underdeveloped – slightly less than 10 percent – versus [about] 22 percent of artificial zero-calorie types. So there is a lot of headroom for retailers in the natural segments, mainly [in] stevia,\" he explains.

Peter Sokoloski, private label manager with NOW Foods, Bloomingdale, Ill., also sees strong sales potential in stevia, with many large retailers adopting store brand versions of the product. In addition, he points to erythritol, a naturally occurring sugar alcohol found in various plants that contains virtually no chemicals, as another product retailers should consider private labeling.


Do
consider introducing more natural alternative sweeteners, which are growing in demand.

Dont
be afraid to go beyond granular; consider offering store brand alternative sweetener liquid concentrates.


Other areas of opportunity lie in monk fruit and agave nectar, Rigg adds.

And for those seeking a solution that doesnt require them to completely give up traditional sugar, retailers might want to consider product development centered on blends. Jennifer Alli, sales development manager, national accounts with Westchester, Ill.-based Ingredion, notes that shes seeing more brands offering blends of high-potency sweeteners with nutritive sweeteners, which offer consumers \"a mid-calorie sweetening solution.\" She points to a sucrose-stevia blend as an example.

Granulated or liquid?
Whether its stevia, sucralose or another alternative sweetener variety, Sokoloski and Rigg agree that most consumers prefer granulated options. And both agree that packaging type is important to winning the sale.

Sokoloski notes that several major retailers – including Trader Joes, Whole Foods and Kroger – carry their own-brand granulated stevia in single-serve packets, a packaging type favored strongly by many consumers today.

\"Retailers need to get packet versions of sweeteners on their shelves,\" he states. \"Consumers are looking for convenience above all. Packets provide this convenience, whether youre talking about sugar, stevia or artificial sweeteners.\"

For his part, Rigg points to bigger pack sizes as an area of opportunity.

\"In the sucralose segment, large 9.7-ounce granulated SKUs are the top private label items,\" he states. \"And now we are starting to see that with stevia granulated pouches for retailers introducing the item. In fact, at one large retailer, the private label stevia pouch is already the number-one private label offering in natural [alternative sweeteners].\"


Do
think about offering products such as sugar-stevia blends to appeal to shoppers who might not like pure non-sugar sweeteners.

Dont
limit merchandising activity to the shelf – consider using special baking displays to promote store brand alternative sweeteners.


Still, some are looking beyond granulated with their alternative sweeteners. Alli notes that she has seen several brands introducing alternative sweetener concentrates with added flavors in liquid format. These sweeteners are packaged in squeezable bottles that consumers can carry in their pockets or purse.

According to the Global New Products Database of global market researcher Mintel, at least two retailers recently launched alternative sweetener liquid concentrates in squeezable bottles under their own brands: ALDI with its Sweet Additions Zero Calorie On the Go products (including stevia and sucralose) and Safeway with its Safeway Kitchens items (including stevia, sucralose and monk fruit varieties).

Make a pretty pack
Whether its a squeezable bottle, a pouch or a carton of single-serve packets, retailers need to make sure a packages messaging is designed to grab shoppers attention.

According to Rigg, retailers are using designs that offer \"stronger appetite appeal\" to drive sales.

\"Fresh berries and appealing cups of hot beverages side by side not only indicate possible usage, but also inject color and appeal into the packages,\" he states. \"Kroger is one customer that already has taken packaging to a higher level, but other leading retailers are improving food photography, as well.\"

Rigg adds that retailers should color the background of each package with its respective sweeteners associated color: yellow for sucralose, green for stevia, pink for saccharine, etc. Doing so helps shoppers easily find their preferred variety of sweetener.

Proper front-of-pack claims also should be added to boost awareness of the contained product, Alli states.

In addition, packaging should sport verbiage aligned with whatever product message the retailer wants to communicate to its customer base, Sokoloski says.

\"Are they selling a value brand and need to show the similarity between the leading national brand versus their store brand? Or are they presenting a lower-calorie or enhanced flavor alternative that they can merchandise in a prime location?\" he asks. \"They need to clarify their brand position and base packaging and marketing decisions on this.\"

Turning to merchandising, retailers need to make sure to position their alternative sweeteners adjacent to their sugar, as consumers expect to find them in that spot, Rigg points out.

\"From a promotional and merchandising standpoint, however, off-shelf merchandising events really work well,\" he adds. \"Baking display units or new year, new you weight-loss themes are examples.\"

Retailers also could secondarily place their own-brand alternative sweeteners in the nutrition section, Sokoloski states.

And if the private label sweetener is all-natural, Alli suggests retailers to secondarily place the product in their natural and organic section, if they have one.

Motivated by weight concerns, not taste
Although U.S. consumers have a number of reasons to consume low- or no-calorie artificial sweeteners, a large number do so because of weight concerns. \"Sugar and Sweeteners â?? US,\" a September 2013 report from global market research firm Mintel, notes that 46 percent of survey respondents who use sugar and/or sweeteners in food and drinks or in cooking and baking said they use these substitutes because they are less likely to be concerned about calories when eating them.

\"Additionally, four in 10 say they use them to lose weight, and nearly a third [use] them to maintain their current weight,\" the report states.

Meanwhile, only 26 percent of respondents said they use low- or no-calorie substitutes because they taste better than sugar and other substitutes.

\"These results clearly show that weight loss/control is the primary motivation for use,\" the report explains, \"and that marketers will be challenged to persuade most users that the taste of substitutes is reason to buy them.\"

Look whats new

New from Walgreen Co., Deerfield, Ill., Good & Delish Sweetener with Aspartame contains no calories. The kosher-certified product contains no saccharin or sodium, and may be useful in a diabetic diet on the advice of a physician. It retails in a 4.05-oz. carton containing 115 packets of sweetener. Each packet is said to equal 2 teaspoons of sugar.

Safeway Kitchens Monk Fruit Liquid Extract contains 0 calories and is suitable for people with diabetes. Available from Pleasanton, Calif.-based Safeway Inc., the kosher-certified liquid sweetener retails in a 1.68-fl.-oz. pack containing 80 servings.

Now available from Batavia, Ill.-headquartered ALDI Inc., Sweet Additions On The Go Zero Calorie Sucralose Liquid Sweetener is calorie-, gluten- and lactose-free. The kosher-certified product is said to be suitable for people with diabetes, and can be used in both hot and cold drinks. It retails in a 1.68-fl.-oz. recyclable plastic bottle that provides 200 servings.

Trader Joes Organic Liquid Stevia is a calorie-free natural sweetener. Recently introduced by Monrovia, Calif.-based Trader Joes, the USDA organic-certified product may be used to sweeten both food and beverages. The vegan sweetener retails in a 2-fl.-oz. glass bottle that includes a dropper and contains 461 servings.

Source: Mintels Global New Products Database