You could say that sugar-free confections have a new-found freedom. Thanks to the development of new sweeteners and the backing of major candy brands, the niche category is now outperforming the sales growth of the total U.S. confectionery market, according to a new report from Euromonitor International titled “Health and Wellness Food in the U.S.”

From 2004 to 2005, reduced-sugar confectionery sales grew by 6.1 percent in the United States to reach $3.3 billion. Over the same year, the total confectionery market grew at a much slower rate of 1.3 percent, reports Euromonitor. It is true that reduced sugar-confectionery comprises only 13 percent of the confectionery market, but that share has grown from just under 11 percent in 2002.

But the United States is not the first, nor will it be the last, country to shine with sugar-free. Across the Atlantic Ocean, the UK has seen a 36 percent growth in the past three years in “confections that have traded sugar for bulk sweeteners,” according to a UK spokesperson for Palatinit, a Germany-based producer of a number of sugar-free ingredients such as Palatinose.

Additionally, just over 34 percent of United Kingdom consumers are now avoiding sugar, while in France and Germany, the figures are 40 percent and 37 percent, respectively, according to Mintel. It and other market analyst companies say the sugar-free surge is not limited to Western Europe and the United States.  China is believed to be the next up-and-coming market for sugar-free products, having experienced a 146 percent growth rate of sugar-free gum in 2005 over the previous year.

There is reportedly also “impressive sales potential” in new markets such as Poland, Russia, Turkey, Greece and South America. U.S. manufacturers are therefore taking an increasing interest in new sectors such as these, where demand far exceeds supply.

Health concerns (including an alarming increase in diabetes, but certainly not limited to that) have piqued consumer interest in the category, especially now that major confectionery brands, with much better-performing/better-tasting sugar substitutes, are now commonplace to sugar-free selections. What was once a targeted niche market, typically sold only through health food stores or the less-traveled sections of drugstores and supermarkets, is now a mainstream attraction. It is safe to say Americans now view sugar-free confectionery as a healthier alternative to the entire category, rather than just a product for diabetics.

Russell Stover and Hershey were two “big name” players first on the scene. Russell Stover introduced its own line of sugar-free confections, including sugar-free jelly beans, sugar-free chocolate assortment boxes and sugar-free caramels. Primarily using the sweetener lactitol, Hershey initially unveiled sugar-free Reese’s Peanut Butter Cups, York Peppermint Patties and Jolly Ranchers, then last year added sugar-free White Reese’s Cups, Twizzlers and Baking Chunks.

More recently, many other mainstream players have been added to the sugar-free lineup, including Nestlé Crunch and Dove Sugar Free Chocolate in three dark varieties.

From the gourmet side, Godiva also ventured into the sugar-free sector with products containing maltitol.

When it comes to merchandising sugar-free, recent research reported by the National Confectioners Association (NCA), shows that best-practice retailers establish a sugar-free section within the regular candy section, rather than lining up sugar-free SKUs with their non-sugar-free brand counterparts. Retailers who set it up as a separate section are showing significantly higher sales.

As for the category’s outlook, Euromonitor is just one that has gone on-record with the good news, predicting that sugar-free products “will record strong growth of nearly 5 percent per year, over the next five years.” Additionally, “not only are sugar-free products expected to benefit from wider distribution, but they will also benefit from a more durable health message than that of low-carb products,” it reports. n

It is only to be expected that sugar-free chocolate candy would come off the “euphoric high” it had over a year ago during the peak of the low-carb days. But together with non-chocolate candy, excluding gum, “it’s still about a $350 million category; it’s bigger than licorice and larger than mints (without breath fresheners),” says Jim Corcoran, vice president of trade relations for the National Confectioners Association (NCA). “There’s no way this category is not going to grow, especially with the current demographic trends of baby boomers and also the increase in diabetes.”

Some predict the sugar-free confectionery market will grow even stronger with the rise in diabetes. The occurrence of new cases of Type 2 diabetes has doubled over the past three decades, according to a recent report in the American Heart Association’s Circulation Journal. It was further reported that “most, but not all, of the increase in diabetes occurred in people who were obese — those with a body mass index of 30 of more.” For those who were not obese, the findings suggested that “changes in dietary and physical activity patterns that are independent of changes in body weight may also contribute to the present findings.” For example, another study from the same team showed that “consumption of sugar-sweetened beverages is an independent risk factor for diabetes, even after adjustment for weight gain.”

Will the same conclusion be made for sugar-sweetened daily treats? Perhaps, but industry experts believe that along with sales gains in sugar-free will come sales gains in smaller and single-portion treats.

“I am a diabetic and I still want the real thing — just less of it,” admits one manufacturer of both sugar and sugar-free confectionery.

The vast majority of American consumers (78 percent) would prefer to have more information about what is sweetening their foods.  That’s according to a recent survey of 1,786 respondents conducted by Harris Interactive for the Sugar Association.  

And it’s not surprising, given the long list of sweetener options available today. According to Andy Briscoe, president of the Sugar Association, 26 different ingredients are currently used to sweeten foods.

Nearly seven out of 10 respondents (68%) said that when a food or beverage contains alternative sweeteners (polyols and artificial), they wanted to see them listed on the front of the package.

Given a list of four sweetening ingredients and asked to identify which was a sugar alcohol/polyol sweetener, only 19 percent could answer correctly, while 76 percent of respondents were unsure. In addition, fewer than half of survey respondents could correctly classify commonly used food ingredients as fat, protein, carbohydrate, sweetener, vitamin, mineral, preservative or bulking-filler.