Sweeter than Sugar

Tweet

It used to be that by slapping a "diet" or "low fat" label on a popular food, you'd have yourself an instant market of would-be dieters and health nuts. But within the last decade a new buzz term has proliferated on grocery aisles across the country--let's call it the cult of "all-natural." The all-natural product, much like its diet predecessor, can be found in food categories from juice to poultry. Most recently, a slew of companies that produce all-natural sweeteners have tried to get in on the natural foods bonanza with mixed results.

Part of the difficulty for a natural brand like Zsweet, which we profiled in this year's start up package, is the competition it faces not from other natural brands, but from the artificial sweetener market. As today's LA Times examines, the artificial market has only continued to grow over the last fifty years, most recently due to the explosive success of sucralose-based Splenda, which hit the market in 1999.

Capturing a market for Zsweet and the like is more difficult because consumers who shop for a diet product are not necessarily the same as those who seek a natural product. In other words, if you buy Equal or Splenda for the low calories, you'll need some convincing that a natural alternative up to 30 percent more expensive is worth your while. Similarly, a consumer who buys natural sugar for the taste and to avoid artificial additives, may not be interested in the supposed health benefits of lower-calorie Zsweet, which, when all is said and done, tastes nothing like sugar. Complicating things, Coca-Cola is currently in the works to create its own all-natural, low calorie sweetener. If the product takes off and is sold for considerably less, it could pose a major threat to fledgling brands like Zsweet.

If you were at the helm of a natural sweetener start up how would you position the brand? How would you differentiate yourself from the competition? And what market segment would you pursue?