Sugar producers and marketers have been hit hard by world price declines, a flood of low-cost Mexican imports, high stock levels, and face the serious likelihood of lower purchase and consumption levels in response to growing concerns about the negative health effects of added sugars.

In the face of these challenges, numerous opportunities abound for marketers of retail sugar products to offer consumers benefits beyond commodity sugar, especially with brands offering niche sugar and sweetener products. In the $4.3 billion industry for sugar, sweeteners and sugar substitutes, niche marketers provide reason for optimism.  That’s the latest market assessment from Packaged Facts and its report, “Sugar, Sugar Substitute, and Sweetener Trends in the U.S., 4th Edition.”

“Reasons for optimism persist for marketers and retailers across most all sugar and sweetener types,” says Packaged Facts research director David Sprinkle. “In general, we expect the greatest growth and activity areas to be in relation to niche sweeteners, including organic sugar, agave nectar, coconut sugar, honey, and natural zero-calorie sweeteners stevia and monk fruit.”

Packaged Facts expects that brands offering benefits associated with health, economic and ecological sustainability will continue to show growth in 2014 and beyond.  In the past these benefits have been offered primarily by niche brands, often with limited availability in the natural foods channel. More recently, these products are increasingly available in the aisles of mainstream grocery and mass merchandise retailers.  For retailers, carrying a carefully selected assortment of niche sugar products could help drive category growth. 

Additionally, Packaged Facts believes that many of the benefits previously associated with niche sweeteners—such as fair trade, organic, non-GMO, recyclable packaging and even more convenient, smaller bulk packages with recloseable packaging features—represent an opportunity for traditional sugar brands. 

Segmentation research and targeted marketing campaigns will allow sugar marketers to best determine which attributes to highlight to which consumers and how best to reach and appeal to them.  Consistent with this approach, Packaged Facts expects there will be more mainstream sugar brands starting to carry seals or otherwise more visibly promote specific product benefits on sugar product packaging. 

For more information, visit: http://www.packagedfacts.com/redirect.asp?progid=86535&productid=8199080.