Living the sweet life

Articles
August 14, 2009

Living the sweet life

If Jackie Gleason ran a supermarket today, he'd give his bug-eyed grin and shout, "How sweet it is!" At least all is well in the sugar and substitutes aisle.

If Jackie Gleason ran a supermarket today, he'd give his bug-eyed grin and shout, "How sweet it is!" At least all is well in the sugar and substitutes aisle.

Why not? As the recession took hold, consumers took comfort in small pleasures such as sweetness in their foods and beverages, and perhaps some more home baking as they visited restaurants less and less. While people are looking to eat healthier today, one would be hard-pressed to find evidence that sugar or a substitute as part of a balanced diet is unhealthy. Indeed, after a downturn when people sought to avoid sugar spikes and crashes, many have begun to think again of sugar as a desirable natural choice.

As a result, dollar sales of granulated sugar rebounded with a 7.9% gain in U.S. food, drug and mass merchandiser stores (including Walmart) to $1.23 billion in the 12 months ended June 13, 2009, according to Nielsen data. This contrasts sharply with the 1.9% dollar sales drop to $1.14 billion experienced in the prior 12 months. All data refers to prepackaged, UPC-coded products only.

Within this gain lies proof that consumers view sugar as a commodity. The bulk of this gain went to private label, which commands two-thirds of the segment's dollar sales. Private label jumped by 10.9% to $826.6 million, after a 4.3% decline to $745.7 million in the previous 12 months. By contrast, brand sales edged up by 2.4% to $405.5 million in the latest12 months.

Granulated sugar is still king of the aisle. All of the other segments combine to add up to about $800 million. Most of these sales ($509.2 million, up 2.8%) occur within sugar substitutes such as aspartame ($68.3 million, down 11.2%), agave ($5.6 million, up 110.2%), stevia ($2.9 million, up 368.7%), and the combined figures of several dozen other substitutes such as sucralose, fructose and maltitol ($432.2 million, up 4.2%), the Nielsen data show.

As for the other segments:
Dollar sales of brown sugar jumped by 11.2% to $174.2 million in the latest 12 months, eclipsing a 4.2% rise to $156.6 million in the prior period. On the strength of an 18.5% leap to $76.3 million, the private label component came closer to being on par with branded sales, which grew by 6.2% to $97.9 million.

The trend is similar in powdered sugar, which bounded ahead by 10.5% to $99.5 million in the most recent 12 months, topping the 2.7% increase to $90.1 million the year before. With a 17.9% dollar sales leap to $50.0 million, private label copped the majority share of this segment. By comparison, branded sales were up 3.8% to $49.5 million, reported Nielsen.

It seems as if the consumers who want 'natural' have moved decidedly to granulated sugar instead of any sugar substitutes that bear 'natural' claims. The equivalized unit volume sales (16 ounce basis) of practically all 'natural' sugar substitutes plummeted by more than 24% during the latest 12 months - and this led in turn to dollar sales declines of nearly 12% to $43.5 million in U.S. food, drug and mass merchandiser stores (excluding Walmart), reported Nielsen LabelTrends.

On another note, recent stories in the news warn of a sugar shortage due to weather conditions in India and Brazil and because of the increased use of sugar to produce ethanol. The pressure is on the Obama administration to raise import quotas as prices increase for consumers and supplies lessen. This week the price of sugar reached a 28 year high.