Organic, no-/low-sugar products top 'good-for-you' segment

by Keith Nunes
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CHICAGO — As various diets move into and out of vogue and consumers search for a weight loss magic bullet, two "good-for-you" consumer packaged goods segments — organic and no-/low-sugar — stand out from the rest for their ability to generate especially strong and sustained growth, according to new research from ACNielsen.

The "carb conscious" segment — products with label claims such as "For your low-carb lifestyle" — actually topped the list of 11 good-for-you segments tracked by ACNielsen for generating the highest growth in the first 12 weeks of 2005, up 20.2% vs. the same period this past year. However, that increase was off sharply from the segment’s peak one-week growth rate of more than 200% in mid-June of 2004.

In fact, sales within the carb conscious segment have been slowing steadily ever since. For the one-week period ending March 19, sales of such products actually declined 2.5% compared with the same period last year. It was the first one-week sales loss for the segment since ACNielsen began tracking carb conscious products in 2000.

On the other hand, the organic and no-/low-sugar segments have proven much better able to sustain strong sales growth,

"Clearly, consumers want to lose weight and eat more healthily overall," said Alice Fawver, senior vice-president of marketing for ACNielsen U.S. "The sales numbers show people will flock toward diets that promise results.

"However, keeping people on such diets has proven more challenging. The good-for-you product segments that are enjoying the most sustained success are those that offer health benefits without requiring a whole new way of eating."

Besides the organic and no-/low-sugar segments, those generating consistent year-over-year sales gains include the flax/hemp seed, whole grain, no-/reduced-lactose, and no-/reduced-calorie segments.

While the growth rate for the no-/low-fat product segment has been in the low single digits, it is the largest good-for-you segment, with sales topping $32.6 billion in 2004. Therefore, even modest percentage gains translate into significant dollar volume gains.

Good-for-you segments meeting with less success include the no-/reduced-sodium and soy segments.

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