Sweet Summer Send Off: Natural Sugar Substitutes Are a Bright Spot in the Sweetener Category at the End of August

FMCG and Retail | 09-07-2018

The continued shift toward healthier eating has certainly affected the U.S. sugar and sweetener market. Sales across the sweetener category are down year-over year, particularly for sugar. And as summer comes to a close, the last week of August has been no exception to the slowdown in sugar. According to Nielsen’s Friday morning data for the week ended Aug. 31, 2018, weekly sales of sugar are down 11% in dollars and 9% in units.

Yet even as the category sales have dropped, some natural sweeteners have found sweet success at the tail end of the summer.

Consumers Are Taming Their Sweet Tooth

Over the past few years, consumer demand has shifted away from sugar and other traditional sweetening agents. As a whole, the sugar and sweetener category is down in both dollar (-2.1%) and unit (-3%) sales compared to a year ago as of the week ended July 28, 2018. In fact, the overall category has been on the decline over the past four years. Both dollar sales (-4.5%) and unit volume consumption (-4.1%) of sugar are down year-over-year, with a declining compounded annual dollar growth rate of 1.7% over the past three years. And sales of sugar substitutes like sucralose, saccharin, aspartame and even agave continue to fall as well.

With the rising popularity of low-glycemic, Whole 30 and Ketogenic lifestyles, many consumers are literally taking a measured approach to monitoring their sugar consumption levels. And that means they are being extremely conscious of sugar claims on products

In fact, we’re seeing that many shoppers are already adjusting their taste buds to do away with sweetness all together. Products with no added sugar are fueling growth across the store and within many different categories and departments. Liquid coffee with no added sugar is up 55%, and granola bars with no added sugar are up 35%. Across the store, products dropping the added sugar are winning sales.

THE SWEET RISE OF STEVIA AND MONK FRUIT

So, what’s seeing sweet success among sugars and sweeteners?

Today, the sweet spot among sweeteners lies in plant-based products like stevia and monk fruit. According to Nielsen’s reference data, sales of products that claim to contain stevia are up 17% during the week ended Aug. 31, 2018, compared to a year ago, and on an annual basis, growth is up an impressive 16% year-over-year. Sales of stevia as a product on its own are also up 11% for the same week.

Just like no added sugar products, Stevia is having a natural halo effect across the store. Overall, growth remains strong at 12% during the 52 weeks ending April 7, 2018. But, according to data from Nielsen Product Insider, it’s products like ice cream, chocolate and fruit drinks that are embracing stevia, and consumers are happy to join in. In fact, stevia’s success is even making its way into the health and beauty care aisles, as categories such as toothpaste (+72%) and supplements (+27%) are posting significant growth for products containing the sweetener.

Monk fruit, a calorie-free sweetener that’s become trendy among health-conscious eaters over the last few years, is also making moves across aisles, specifically in diet and nutrition as well as dairy. Lactose-free milk, ice cream and other frozen novelties sweetened with monk fruit are all showing strong growth in food and beverage. And this success is working its way across the store, growing more than 150% in vitamins over the past year, as well as finding success in nutritional bars and shakes.

Some insights from this article were fueled by Nielsen Friday morning data delivery, the earliest FMCG market read available. Learn more about Friday morning data delivery.

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