Despite growing numbers of diabetics, specialist diabetic confectionery will come under increasing competition from the growing market for sugar-free products, reports Euromonitor International. While specialist producers of diabetic foods need to innovate to survive, there are great opportunities for mainstream confectioners to extend into the sugar-free market.

Although the number of diabetics is increasing around the world, the overall market for diabetic confectionery remains small, worth only a fraction of total confectionery sales. Medical opinion in some developed markets frowns upon the use of specialist diabetic products and many developing markets only offer staples in diabetic formulations. This is a consequence of the specialist nature of diabetic products which suffer from restricted distribution, despite recent improvements, and a medical image making them unappealing for the average consumer.

Moreover, increasing interest in sugar-free confectionery is undermining the diabetic confectionery market, with diabetic consumers now more likely to buy sugar-free confectionery which can be shared with family and friends, at their local convenience store.

Medical opinion on diabetic products varies
In a significant number of markets there is a strong body of medical opinion that disagrees with marketing of specifically targeted diabetic products. Instead, people suffering from diabetes are recommended to eat a carefully adjusted diet of normal foods, in order to maintain good general health, while controlling their condition.

This attitude is prevalent in Australia, France, Hong Kong, Norway, the UK and the US, and particularly applies to the consumption of non-essential items such as confectionery, where medical practitioners strongly recommend self-control rather than consumption of diabetic products. Thus recommendations for dietary control of diabetes have effectively minimised the role of diabetic foods in these markets. Furthermore, products described as “suitable for diabetics” which may be found in a typical healthfood store are generally sugar-free variants of a mainstream brand, rather than a specialist diabetic product formulation.
According to Euromonitor’s latest reports on Dietetic Foods, however, sales of specialist diabetic foods are significant in a number of countries including China, Italy and Germany.

Confectionery and chocolates remain a small category
The emphasis of consumer purchasing in most countries remains on the more staple dietary elements of jams & spreads, and biscuits & cakes, although diabetic sweets & chocolates represent an important element in Germany, the Netherlands and Spain, particularly in value sales terms as these products typically have a higher unit price.

In Japan and China, the primary product focus of diabetic foods is on staple elements, such as rice and noodles, although some diabetic biscuits and cakes are also marketed.

These differences in product availability underline distinct regional differences in diabetic products with Western markets driven by aspirational purchasing while Asian markets are more need-driven. It also highlights significant differences in approaches to disease prevention and control, with Asia Pacific typically adopting a more holistic approach.

Distribution channels for diabetic products are changing
Due to the semi-specialist nature of the product and the frequent need for professional advice on product selection, diabetic products have traditionally been distributed primarily through chemists, drugstores and healthfood stores. 

During the review period these channels have lost sales to supermarkets/hypermarkets in many countries, as grocery retailers have come to realise a potential opportunity to market these products more seriously in their stores as an extension of health and wellness fixture areas.

As a result, major retailers tend to group both diabetic and sugar-free products together, although this varies by brand. For example in the US, sugar-free brands such as Sweet & Low or Golightly are typically placed separately, near to OTC drugs, while Philip Morris’ Life Saver Delites appear in the standard confectionery section.

It is significant, however, that larger manufacturers are starting to take note of sugar-free products and that these products are moving out of specialist channels into supermarkets and convenience stores.

Sugar-free confectionery offers greater returns
Diabetic foods are typically manufactured on a regional or local level, with few multinational companies involved. Notable exceptions include Nestlé, Kraft, Numico and Hain Foods, along with others which are specialists in a particular area, such as Suchard in confectionery or Bahlsen in biscuits.

Sugar-free rather than specialist diabetic products are far more common, appearing in the range of most confectionery manufacturers. Sugar-free confectionery appeals to a far broader demographic than diabetic products. Combined with the fact that at retail it can be as much as 20% more expensive than standard variants, and is still becoming increasingly popular, sugar-free offers far greater returns than diabetic products.

Diabetic products unlikely to emerge from niche status
Healthcare professionals now advise against the consumption of specifically targeted products for diabetes sufferers in many countries. The objective is to optimise blood glucose control, which requires individual tailoring of the dietary balance to suit each sufferer’s needs, and opponents claim the role of a ‘universal’ product format is misleading.

Furthermore, diabetic foods are treated as specialist products by the population at large, and thus have a very low user base. By contrast, sugar-free products are seen as suitable for anyone wishing to restrict their sugar intake, for instance those on a diet or aiming for a healthier lifestyle.

Consequently, there is significant potential for manufacturers of well-known confectionery brands to expand their brands with sugar-free offerings, taking the market for diabetic and sugar-free products out of the specialist arena and into the mainstream.

Related Research from Euromonitor

The World Market for Dietetic Foods
The Market for Dietetic Foods in Australia
The Market for Dietetic Foods in China
The Market for Dietetic Foods in France
The Market for Dietetic Foods in Germany
The Market for Dietetic Foods in Italy
The Market for Dietetic Foods in Norway
The Market for Dietetic Foods in the UK
The Market for Dietetic Foods in the US