BULKING UP ON SUGARLESS

JONNA CRISPENS Additional reporting: BOB BAUER

Sugarless candy represents only a small portion of bulk candy sales, but retailers contacted by SN said its future remains promising.

Sales are being fueled by the nation's growing concern over healthy eating and the diet restrictions placed on an aging population, retailers said.

As a result, price has not become an issue, according to sources polled. Consumers have not shied away from the sugar-free varieties, even though they often cost considerably more than their conventional counterparts.

Retailers told SN they're bullish on the future of the sugarless bulk candy segment. Most predicted the category would continue to establish itself and gradually command a larger chunk of space within the bulk candy section.

Here's what retailers had to say about the sugarless section of the bulk candy category:

Rob Ahr

deli, cheese, bulk food buyer-merchandiser Scott's Food Stores Fort Wayne, Ind.

We have bulk candy displays in all of our stores and have a fairly large sugar-free section.

We currently carry 10 varieties of hard candy, two flavors of licorice, gummy bears and about 12 varieties of chocolate -- and we'll be introducing four new sugar-free items in the next week or so.

I think health-conscious consumers and those with restricted diets are fueling sales. For diabetics, it's either sugar-free or nothing. That's one of the reasons I decided to expand the line -- to offer them a little variety.

Our sugar-free bulk candy is in a separate section, but it's not really signed. I do, however, plan to create a signing program for it in the future, which should draw attention.

We don't really advertise our sugar-free candies, but we do offer them at very competitive price points. For example, we sell our sugar-free chocolates for $5.99 a pound, compared to our competitor, which sells them at about $7.99 a pound.

Buyer

Large Eastern wholesale company

Although we're not carrying any sugar-free candy in bulk, I do believe there's a growing market for that segment of the category.

Consumers are more health-conscious than they used to be. You see parents buying their children sugar-free gum and encouraging them to eat healthier foods. There's also a growing number of senior citizens who have to live with restricted diets. They want the sweet taste of candy, but they can't have the sugar.

We recently introduced four varieties of sugar-free candies. I've been waiting for a manufacturer large enough to service our company to approach us about sugar-free bulk candy. If one did, I think I would carry its products.

Sugar-free candy does tend to be higher priced than regular candy, but I think consumers will buy it nonetheless, as long as the price isn't too unrealistic. I think a diabetic and someone who is really health-conscious will pay the extra 20 to 30 cents a bag for sugar-free candy.

Adam Rini

buyer/specialist Associated Wholesale Grocers Kansas City, Kan.

I think sugar-free candy offers an opportunity to grow the bulk candy category. It really appeals to consumers concerned about their health and weight.

At the same time, however, I'm not overly optimistic about its future. It's been around a long time and its customer base is still comprised mostly of people on restricted diets.

Consumers who are really health-conscious are probably avoiding candy altogether, and those that want candy are more interested in buying the real thing.

Still, my own philosophy is to always try something new; and although I haven't offered sugar-free bulk candy in the past, I would be willing to offer it in the future. Some of our produce buyers also purchase bulk candy, and they may already be offering it.

If I end up introducing sugar-free bulk candy, I'll probably sell it at the same gross profit margin as my other bulk candies. I think consumers looking for this type of item are willing to pay the extra cost.

Buyer

Large West Coast chain

I'm surprised at how well the category is doing. Customers don't seem to have too much of a problem paying the higher prices associated with sugarless candies. Sometimes they can cost as much as double what regular candy costs.

Part of the reason price isn't as large an issue as one might think is because many of the people eating sugarless candy have no other choice. It's either sugarless or nothing.

We try to keep our price on sugar-free bulk candy a little lower than our competitors because it may help create some customer loyalty. You have a person with a special need and they see you're priced lower than the others. That may be enough to keep them in your stores and out of the others.

We put our sugarless varieties right next to our regular candies, but set them off with signage. It's important to separate the two so you don't have buyers of either one picking up something they don't or can't eat.

John Azzolina

bulk foods supervisor Food Circus Supermarkets Middletown, N.J.

We have bulk candy displays in four of our stores and offer sugar-free varieties in all four locations.

We carried only a few sugar-free varieties up until three or four years ago when we expanded our offering to about two dozen, depending on the store.

I think sales of sugar-free candies are being at least partly driven by older consumers on restricted diets. For us, sales are strongest in areas where there are large senior citizen concentrations.

Although I haven't promoted the sugar-free segment of the line heavily in the past, I'm planning to focus more strongly on it in the future. Consumers are more health-conscious than ever, and I think more of them would purchase sugar-free candies if they knew we offered them. There's definitely room for growth in the category. One obstacle to sugar-free bulk candy sales is the price. Sugar-free gummy bears, for example, cost $3.99 to $4.99 a pound, compared to the $2.99 figure for regular gummy bears.

Cindy Yost

buyer of special foods and confections West Point Market Akron, Ohio

There's definitely a market for sugar-free candy, and the more than half-dozen varieties we carry in our bulk food bins are selling well.

I think the segment's growth is being driven by a lot of factors. I think people are simply more health-oriented today. Adults are buying it for themselves and their children. People on health-restricted diets are also buying it. Some of our customers were actually referred to our store by their doctors for sugar-free candy.

I also think candy manufacturers have improved the taste of their products in the last few years. Sugar-free candy can taste very close to the candy it's trying to imitate. Taste isn't really sacrificed for health.

We merchandise our sugar-free bulk candies by placing them in a separate section -- slightly off to the side of our regular candies -- and signing them. In addition, our customers know they're always welcome to taste a candy before buying.

All of our bulk candies -- including the sugar-free ones -- are priced at $4.98 a pound, which allows customers to pick and mix their purchases.

Eric Lowery

assist. produce manager Buckeye Village Alliance, Ohio

We introduced sugar-free candies into our bulk bins about a year and a half ago.

I think customers are definitely more interested in sugar-free candy than they were in the past. People watch what they eat because they're concerned about their health and want to make the right choices. Some people don't have a choice as far as sugar is concerned; sugarless candy is the only kind of candy they can eat.

We run regular promotions on our bulk candy, but we usually don't include the sugar-free varieties.

Our sugar-free candies are more expensive than our regular ones. A pound of sugar-free candy might cost $3.69 per pound, compared to $1.40 to $1.99 for our regular. Still, I think that people looking for the product are willing to pay the price.

Brian Guthrie

grocery manager West Linn Thriftway West Linn, Ore.

We have about 40 varieties of bulk candy, but we stopped carrying sugar-free varieties in our bulk category a while back because they weren't selling well enough.

Our store carries prebagged sugar-free candy, and I think it meets our customer demand for that type of product.

I'm not planning to reintroduce sugar-free candy into our bulk category, but I do believe it has a future. I wouldn't be surprised if we reintroduced it a few years down the road. For that to happen, however, I think we'd have to see enough customers requesting it and manufacturers improving the taste. Then I'd have to see if there was room for it by discontinuing some slow-selling varieties.