Indeed, a major factor, according to Market Trends: Diet Candy, a new report from market research firm Packaged Facts, has been the increasing versatility of many artificial sweeteners, allowing for new combinations of flavor, texture, and appearance.
This synergy among ingredients has dramatically increased choices available to US consumers. And leading the charge in this market are low-sugar offerings.
Launches of reduced-sugar products have nearly tripled since 1999.
The market is currently divided essentially between non-nutritive sweeteners, which have no caloric value but hundreds of times the sweetness of sugar; and nutritive, or reduced-caloriesweeteners, which have fewer calories and a slower rate of absorption than sugar, along witha milder sweet taste.
Into the first group fall products such as saccharin, sucralose, aspartame, and acesulfame-K, all of them FDA approved and available both as branded tabletop sweeteners and as ingredients, especially in diet drinks.
The second group, also known as polyols, provide the same bulk as sugar but are sugar free, do not promote tooth decay, and are used in a wide range of foods including chewing gum, candies, ice cream, baked goods, and fruit spreads.
And there are new sweeteners on the horizon. These include dihydrochalcones, derived from citrus fruits; glycyrrhizin, a non-caloric extract of licorice root and thaumatin, a mixture of proteins from a West African fruit.
Awaiting approval in the United States are cyclamate, banned here in 1970 as a potential carcinogen but currently accepted for use in 50 countries; and alitame, an amino acid derivative. According to Packaged Facts, all of these products are many times sweeter than sucrose.
"Though the low-carb craze revved up and perhaps overheated the market, diet candy will outlast any single nutritional or weight loss approach, given the versatility of low-sugar, low-carb, low-fat, and low-calorie product formulations," said Don Montuori, acquisitions editor of Packaged Facts.
"Marketers can also leverage a new generation of artificial sweeteners and more sophisticated sweetener blends, along with the positive consumer recognition of branded sweeteners, such as Splenda."
According to the report, Russell Stover remains the undisputed leader in diet candy, controlling 37 percent of dollar sales in IRI-tracked mass-market outlets as of first quarter 2005. Trailing Russell Stover are Hershey (14.4 percent), Atkins Nutritionals (down to a 12.1 percent) and Kraft (8.7 percent).
The conclusion is that this is a sector that ingredients firms and candy makers should be penetrating. Diet candy sales reached $495 million in 2004. And while that dwarfs in comparison to sales of regular chocolate and non-chocolate candies, the diet candy market's growth has far outpaced that of its full-calorie counterparts.
Between 2000 and 2004, diet candy had a 34 percent compound annual growth rate (CAGR). By comparison, chocolate had a CAGR of 3.9 percent, while non-chocolate candy actually suffered from a negative 2.5 percent CAGR.
Market Trends: Diet Candy is designed to give industry executives a comprehensive analysis of the US retail marketplace for diet candy. Priced at $1,995, this report can be purchased directly from Packaged Facts.