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Lost in the hubbub of the low-fat, no-fat craze is its quieter and older cousin, the diet and sugar-free sector. Aided by better taste, sugar-free products are seemingly everywhere, though most of the action these days is taking place in the ice cream case.According to retail buyers and nutritionists contacted by SN, almost every grocery category features some sort of diet or sugar-free product, items

Lost in the hubbub of the low-fat, no-fat craze is its quieter and older cousin, the diet and sugar-free sector. Aided by better taste, sugar-free products are seemingly everywhere, though most of the action these days is taking place in the ice cream case.

According to retail buyers and nutritionists contacted by SN, almost every grocery category features some sort of diet or sugar-free product, items that once were lacking in taste and purchased only by those with diabetes or some other medical condition.

"You can't segment diet/sugar-free anymore," said Kevin Copper, vice president of merchandising at Sterk's Super Foods, a 10-store independent based in Hammond, Ind. "It isn't like the other days when you had a particular section. There's hardly an area in the store that you don't have 'healthier' foods.

It either has less sugar, less salt, less fat."

Dietetic products are so mainstream, retailers could only identify one area where they're currently standing out -- ice cream.

"A lot of the players are coming out with sugar-free ice cream, and now sugar-free, fat-free ice cream," said Mark Polsky, senior vice president of Magruder Inc., Rockville, Md.

"Frozen desserts is probably where we're seeing the biggest increase in product activity," said Jeanine Sherry, corporate nutritionist at Ukrop's Super Markets, Richmond, Va.

Mark Duke, grocery buyer at Brookshire Bros., Lufkin, Texas, said most of ice cream's diet and sugar-free products are in the novelty segment. "We have the Eskimo Pie squares. The vanilla and butter pecan do real well. There's a chocolate that doesn't do quite as well," he said. "We also have Guilt Free ice cream with no added sugar or fat."

"There's the ice cream, and now we're looking at the pie season with Mrs. Smith and Sara Lee," said a grocery executive with a top chain. "They are both sugar-free and fat-free products. We have tasted them. They're palatable and a pretty good product." While these products may make the average shoppers feel like they are treating themselves to dessert and still doing right by their bodies, it is the combination of being sugar-free and low on fat that is important for people with diabetes, said Janet Tenney, manager of nutrition programs at Giant Food, Landover, Md.

"The thing about no-sugar-added ice creams is that unless they are reduced-fat or no-fat, they really aren't a particular benefit over the no-fat frozen yogurts and ice cream for the person with diabetes," Tenney said.

Indeed, nutritionists told SN new guidelines from the American Diabetes Association require a reduction in fat.

"It's not so much sugar, in terms of refined sugar, but total carbohydrate intake. People with diabetes are allowed to have some refined sugars," explained Lori Valencic, a registered dietitian and nutrition specialist at Randalls Food Markets, Houston.

Still, she noted, all shoppers should need to concern themselves with their diets, regardless of their medical condition. "Because if you're eating mostly things with refined sugar, you're not getting vitamins and minerals, and you're missing out on lots of other nutrients. My goal is to help educate them."

Randalls and other retailers are well on their way in this education process, something that should help sales of diet and sugar-free products continue to rise.

Randalls' Valencic not only wrote the chain's Food Guide, but also operates personalized store tours for shoppers.

"What we're going to do as of September this year is have a specific brochure for our customers outlining different health and life factors," said Karen Ferguson, health educator at Greenacres, Wash.-based Tidyman's.

At Ukrop's, "we have a brochure called the 'Appetite for Health Shopping List,' and that was designed [within the last year] specifically for people with diabetes," said Sherry. "We went through our store and ticked off all the products that we carried that were low in sugar and low in fat. Then we listed them by brand name. And it's been very popular."

Giant Food offers a booklet titled, "Diabetes and Food Shopping," said Tenney. "We have it in the stores all the time and it emphasizes how to work with the new food label and whatever menu plan their physician or dietitian has planned for them."

Mike Post, head grocery buyer at Morgan's Holiday Markets, Cottonwood, Calif., has an idea to make shopping for diabetics and others in search of diet and sugar-free products even easier. "I think, as an industry, we need to develop a shelf label to express [that a product is] heart-healthy and that it's OK for diabetics.

"You need to work with diabetics and have some sort of decal or special color on the shelf price tag that delineates a product with just a glance," he said.

Randalls' Valencic reported that products like sugar-free soft drinks, desserts and gelatins are beneficial to all who consume them. And lately they taste better.

"There have always been sugar-free products, but they were almost like medical foods vs. more consumer-oriented for the general population," said Ukrop's Sherry, who's seen a proliferation of diet and sugar-free products since the NutraSweet and Equal revolution.

"I think they're playing a big role for consumers because a lot of people are not only trying to cut back on fat, but now they're taking a look at their sugar intake as well," said Sherry.

"There were a lot of saccharin products before, too," said Giant's Tenney. "You found plenty of saccharin soft drinks and those kind of things. Now some of the products are more palatable. People had taste sensitivities and they didn't always care for the saccharin flavor.

"Traditionally, those also were not just for people with diabetes. The idea was that anybody who wanted to lose weight could use them. But data shows that they don't really help in weight loss."

Nevertheless, some retailers say diet and sugar-free products still are carried primarily for those who absolutely must have them.

"I still don't see them as attracting mainstream people, unless their doctor has ordered them to eat these products," said Calvin Mayne, fancy-food buyer for the upscale Dorothy Lane Market, Dayton, Ohio. "I don't see a lot of people choosing these products. I see more people on a diet going the more conventional route by eating more fruits and vegetables and lowering their fat."

Some said that leaves a significant opportunity for manufacturers and retailers to capture those dieters not purchasing sugar-free dry groceries.

"The growth is with the people who want to eat healthier," said Copper of Sterk's. "They're not willing to give up taste, which was the original problem that a lot of the category had. It just didn't have the quality and character that people were looking for. I think the challenge for all the segments is to try to maintain some type of quality."

"They have got to find an acceptable [sugar] substitute," said the grocery executive with the major chain. "Kraft had to go back to the drawing board four or five times before they could get an imitation cheese that was palatable.

"I think the companies are becoming more professional now and not trying to rush to get something to market, because they have found the products they rushed to the market weren't acceptable," he said. He cited Nabisco's SnackWells as a prime example of a product that wasn't rushed into failure.

Randalls' Valencic normally tells customers that taste is very individualized. "What I taste and what you taste are going to be different. But I would have to definitely say that all the new sugar-free and fat-free products really have improved in taste and quality.

"Down the road we will see some new sugar substitutes that you can actually cook and bake with," she said. "That's going to change some of the things we're going to see on the shelf. Right now you can't successfully cook with those products. So it does limit what people can do."

"But, right now," said Holiday Market's Post, "the market is being overwhelmed with low-fat products."

Have manufacturers forgotten about customers in need of sugar-free products?

"Most people with diabetes are conditioned, after years and years of having the disease, to avoid sugars. But with diabetes education, the No. 1 trend is to lower fat content. No matter what, fat's an issue," said Tidyman's Ferguson.

"So these sugar-free products are very beneficial to diabetics," added Ukrop's Sherry, "especially because a lot of them are fat-free or low-fat. Before, sugar-free chocolate bars were not great for diabetics because they were loaded with fat."

Whether just sugar-free or sugar- and fat-free, retailers expect to see more of the products in the future.

"There are more people becoming diabetic, so there's a need for the products," said Russ Hahn, grocery buyer at Scolari's Food & Drug, Sparks, Nev.

"I believe manufacturers are going to develop more sugar-free products just because diabetes is definitely increasing in America," said Tidyman's Ferguson.

"I definitely see that, too," said Ukrop's Sherry. "The number of low-fat and fat-free products has skyrocketed, with people becoming more concerned with calories and fat."