SWEET ON SUGAR-FREE

LYNNE MILLER

Cookies, cakes and other baked goods that do not rely on refined sugar represent a small category for in-store bakeries. Yet their presence has become a critical ingredient in the overall ISB mix, bakery managers and other observers told SN.

Health-conscious consumers, the aging population, the exploding diabetic population, as well as non-diabetics watching their sugar intake, are feeding the demand, they said.

As a result, retailers carry a greater number of sugar-free products in their bakeries as a way to differentiate themselves from the competition, win over customers -- and meet growing demand.

The numbers tell the story: The diabetic population jumped from 4.9% in 1990 to 6.5% in 1998, and is expected to keep growing at a significant rate, according to the American Diabetes Association. When the Centers for Disease Control and Prevention, Atlanta, releases new numbers later this year, some observers expect the total number of Americans with the disease to increase from about 16 million to 18 million.

"Everyone generally expects an increase across the board," said Jeff Martin, a spokesman for the ADA, headquartered in Alexandria, Va.

While diabetics have to watch out for various forms of sugar that lurk in foods sold throughout the supermarket, nowhere is refined sugar more abundant than in the in-store bakery. It is true that sugar-free baked goods take up a fraction of the display space dedicated to traditional sugary items. But, compared to what was out there a few years ago, the sugar-free lineups have grown tremendously, bakery managers told SN.

"We didn't have anything five years ago," said Debbie Davis, manager of the bakery department at Village Market IGA, Hannibal, N.Y.

That's changed. Davis befriended a diabetic customer who was looking for sugar-free pumpkin pie. Davis began making the item with no sugar added and discovered a small, but eager, audience for the dessert item. It is the only sugar-free product made from scratch in the store's bakery.

During the Thanksgiving holiday season, Village Market sells 10 to 12 sugar-free pumpkin pies, compared to 150 conventional pumpkin pies, she said. When outsourced fruit varieties are added in, the total number of sugar-free pies sold goes up to about 40.

"Pies go over real well," Davis said.

Other sugar-free items delivered to the store in mixes include angel food cake and muffins. Customers can order sugar-free cakes for birthdays and other special occasions, Davis said.

A 20,000-square-foot, independently owned supermarket, the Village Market takes a low-key approach to marketing sugar-free baked goods. Employees know who the diabetic shoppers are, Davis said, and help them find the artificially sweetened merchandise.

The store does some promotion with signage and samplings, said Davis, who believes additional, higher-profile efforts would pay off.

"We should do a better job of advertising them," she said. In the bakery ads, "if we could devote a small space to that, it would make a big difference."

For one thing, the flavor of sugar-free baked goods is better than it used to be, Davis added. Customers report they can't tell the difference between the conventional angel food cake and sugar-free version.

"I think [diabetic] people for years thought they couldn't have baked goods," she said. "Now they realize there are more [sugar-free] products."

As a service to customers, Buehler Food Markets, a nine-store, Wooster, Ohio-based independent, merchandises a handful of sugar-free items, all supplied by third-party vendors. Less than a year ago, the chain added sugar-free oatmeal and chocolate chip cookies. Within the last five years, Buehler rolled out angel food cake, and eventually will offer sugar-free muffins, said Steve Beke, bakery supervisor.

"The complaint in the past has been some of the products are not up to par as far as flavor," Beke said. "Some improvements have been made in the industry in the last few years. I took some [sugar-free products] to my [diabetic] relatives and they said they tasted much better than in the past."

Sugar-free merchandise doesn't add much to the company's bottom line, so store officials must be careful to gauge demand and choose products accordingly, Beke said. "Birthday cakes need icing and you have to decorate them," he said, discussing freshness issues. "You can't just make them, put them out and hope somebody buys them." But compared to five years ago, "there is a better selection now," he said. "The demand is there. It's on the increase."

One small supplier on the West Coast is getting bigger, thanks to the sugar-free trend at supermarket bakeries. Reseda, Calif.-based Fabe's Natural Gourmet specializes in pastries, cookies, cakes and other typical bakery items sweetened with fruit juices -- no refined sugar. The Los Angeles County bakery supplies products to supermarket companies, including Bristol Farms, the El Segundo, Calif.-based independent. Last year, the family-owned company outgrew its 1,000-square-foot kitchen and moved into a 4,000-square-foot facility.

"We expect to expand again this year," said Jennifer Fabos, in charge of marketing and public relations for her family's 10-year-old business. "We do dairy-free and wheat-free [product lines]. It's the sugar-free lines that retailers are looking at first, and where most of our business is from."

A few years ago, sugar-free took New Orleans by storm. Known historically for its rich and fatty cuisine, New Orleans ironically was the birthplace of the best-selling, "Sugar Busters!: Cut Sugar to Trim Fat." Written by three area doctors and a Fortune 500 chief executive officer, the book initially was published independently and came out in hardcover in 1998, advocating cutting sugar as a way to lose weight.

Jay Breaux read it and saw a way for his family's three-store, independently owned supermarket company to stand out from the pack. While the popularity of sugar-free products has ebbed a bit since the book first made a splash, Breaux continues to see strong demand for sugar-free cinnamon rolls, pies, turnovers and muffins, not only at Metairie, La.-based Breaux Mart Supermarket, but at competing supermarket chains.

No Guilt Desserts, a local supermarket bakery supplier, provides Breaux with a line of sugar-free sweets. The retailer also uses other suppliers to provide sugar-free, "thaw-and-sell" products, including angel food cake, creme cakes, muffins and cupcakes. Breaux said his company sets aside 10% to 15% of bakery display space to sugar-free and no-sugar-added products, and about the same percentage of the department's total sales are derived from those products.

"You just merchandise them together in their own section," he said. "That's the key."

He sees no end to the supply of customers who buy sugar-free baked goods -- and no shortage of suppliers furnishing a growing assortment of products.

"I've seen an increase in diabetic customers," Breaux said. "I have customers who have parents who are becoming diabetic. People in their 30s and 40s, they're buying it for preventive maintenance. You've got a lot of bigger suppliers providing sugar-free cakes."

A former advertising associate and chef for Wegmans Food Markets, Rochester, N.Y., Jim Frackenpohl has seen big changes in the way sugar-free products are merchandised in stores.

No longer relegated to the "dietetic" section, products can be found in different areas of the supermarket, and smart retailers are cross merchandising to capture customers at multiple intercepts in the store, Frackenpohl said.