Sweeten the Pot

These aren’t the sweetest of times for sugar, to say the least. Americans want to eat more healthfully, and both health studies and the media are implicating sugar as a leading culprit in the rise of diabetes, heart disease and obesity. With diagnoses of those conditions expected to increase, and with the FDA currently considering whether to require added sugars to be included on nutrition facts labels, consumer concerns about sugar are likely only to rise.

“With recent mainstream documentaries like ‘Hungry for Change,’ ‘Fed Up with Sugar,’ and ‘Big Sugar shedding a new light on the subject, we’ve seen a strong shift in the general perception of sweeteners,” says Benjamin Fleischer, CEO of Naples, Fla.-based Pyure Brands, a manufacturer of both retail and commercial stevia sweetener products.

The news isn’t all bad, however. Consumers still enjoy sweet foods and beverages and will still buy sweeteners. But retailers might find more success on the store brand side with natural sugar alternatives, new sweetener options and an increased emphasis on added benefits.

“Packaged Facts expects that the anticipated market conditions will be good news for smaller niche players highly focused on the retail market and catering to more health-conscious and ecologically oriented consumers,” says Elaine Tecklenburg, author of “Sugar, Sugar Substitute and Sweetener Trends in the U.S., 4th Edition,” a May 2014 report from the Packaged Facts division of Rockville, Md.-based MarketResearch.com, adding that domestic retail bulk sugar is likely to suffer the brunt of the sales slump.

Sell something new

Sweeteners are going well beyond the basic bag or box of packets and being introduced in a number of varieties, and if retailers want to be competitive, they should consider finding ways to make their own-brand sweetener products stand out.

“Retailers should be able to move quickly and execute against new ideas to provide differentiation in the category and marketplace,” says Chris Jones, director of consumer insights at Carmel, Ind.-based Heartland Food Products Group, a manufacturer of both zero-calorie sweeteners and liquid beverage enhancers.

One format becoming increasingly popular is liquid, easy to drop in both hot and cold beverages for instant sweetness, no stirring needed.

“Liquid sweeteners are a convenient, easy-to-use solution,” Jones says. No matter what the format, flavors in general, even savory ones, are becoming popular, with the Packaged Facts report making note of both Splenda Flavors for Coffee — packets of granulated sweetener in flavors such as mocha and hazelnut — and Zulka’s Picante Sugar, which is granulated sugar featuring chili spices. Retailers considering flavors for their store brand, though, might see the most success with liquid forms.

“Flavored sweeteners are emerging as a growth opportunity, primarily in a portable on-the-go format that can compete in the enhanced water space and with concentrates sold under the Skinnygirl and SweetLeaf brands,” Tecklenburg says.

Go natural

With all of the concern about processed foods in general, more customers are turning from artificial zero-calorie sweeteners such as aspartame and saccharin to more natural varieties.

“The alternative sweetener market has been a crowded space for some time now. But with increased consumer awareness surrounding the dangers of artificial sweeteners, the growing interest and acceptance of organic sweeteners has become apparent,” Fleischer says.

Natural sweeteners include stevia, agave nectar and monk fruit extract — all derived from plants — but stevia should perhaps be of particular interest to retailers.

“Stevia-based sweeteners continue to show strong growth in the category, comprising nearly 30 percent of all dollar sales,” Jones points out, adding that the sweetener is available in packets, as well as granulated pouches and liquid forms. For its part, the Packaged Facts report cites both stevia and monk fruit extract as the top zero-calorie sweeteners poised for growth, and with private label sales of them under 10 percent, “there is a considerable opportunity for retailers to launch store brand versions of these natural sweeteners.”

Another type of sweetener gaining traction due to its health profile is coconut sugar, similar in taste to brown sugar. With the Manila, Philippines-based Philippine Food and Nutrition Research Institute determining it to have a low glycemic index, a ranking of how the carbohydrates in foods affect blood sugar, it is becoming particularly attractive to diabetics.

Don’t forget honey

If there is one type of natural caloric sweetener with a particularly promising sales outlook, it is honey, which Packaged Facts describes as a “bright spot” in the market for sweeteners.

“Among the numerous reasons believed to contribute to increased consumer interest in honey include its inherent health benefits, reduced processing, ability to source it locally from known producers, the variety of taste profiles available and versatility in a wide range of food and beverage uses,” the company’s report notes.

Private label honey sales have been slower-growing than for those of the overall market, but broadening store brand honey selections could change that. Creamed honey, easier to spread on foods such as toast, as well as more varietals, particularly locally produced ones, could have more shoppers grabbing the store brand product. More convenient, less messy packaging such as singleserve packets could help boost honey sales as well, according to Packaged Facts.

Offer added benefits

Added product benefits can also make a big difference in the successful selling of store brand sweeteners. One of those benefits is convenience. A plain paper bag, for example, while economic, isn’t always consumer-friendly. Value-added benefits such as recloseable packaging, premeasured portions or bonus packs could have more consumers grabbing your store brand.

“Bonus packs give the consumers a little something extra for their basket,” Jones says. “This can help when new products are introduced, like liquid sweeteners.”

For sweeteners targeted at consumers wanting more natural or healthful products, the right messaging on the package can also compel shoppers to make a purchase, with certification seals becoming more prevalent.

“Consumers of niche caloric sweeteners are interested in understanding and supporting brands and products that offer benefits beyond basic sweetening [such as] Non-GMO Project Verified, Fair Trade Certified, USDA Organic and Eco-Social,” Tecklenburg says, noting that “recyclable packaging is also becoming an important feature of sweetener product offerings.”

One notation that is likely to grab diabetics shopping for sweeteners is the glycemic index, with the lower the ranking, the better.

“Adding the ‘zero glycemic index’ label to your product could effectively increase the size of your market by 29 million diabetic consumers and 86 million pre-diabetic consumers,” Fleischer points out.

Whatever sweeteners retailers decide on for their store brand program, they also need to focus on more than just the price as the main selling point for their products.

“Having the correct price and gap to national brands is imperative; however, leveraging displays and off-shelf promotions helps provide incremental sales opportunities by disrupting the traditional consumer shopping experience within this aisle,” Jones says.

Do consider adding portable liquid sweetener formats to the store brand mix.

Don’t discount flavored sweeteners, which are primed for growth.

Do look at opportunities such as stevia and monk fruit extract within the natural sweeteners space.

Don’t forget to grab shoppers with on-pack messaging that highlights a sweetener’s added benefits.