Sweet nothings

Can Zero breathe life into the sugar substitute market?

Would you like sugar or Zero with that? If Geogi E Zachariah had his way, you'd hear that everytime someone offered you tea or coffee.

The business head of OTC products at pharma company Alembic has a vested interest in getting people to switch from sugar: in January, Alembic launched Zero, a sugar substitute that Zachariah hopes will hit the sweet spot in the low-calorie sweetener market. "Our target is a market share of 10 per cent by the end of the first year," Zachariah says.

That may be tougher than you'd think. India has the highest number of diabetics in the world, but artificial sweeteners have never really taken off here. You want proof? Twenty years after the category was introduced in India, the marketing head of the company behind Equal "" the brand that's generic for sweeteners in the country "" still considers sugar substitutes new territory.

"Selling a sweetener in India is like selling a concept, because it's a new product," declares Amitabh Sehdev, head marketing, Merisant India. The numbers bear that out: the category is worth just Rs 60 crore, and after growing at 12-15 per cent between 2000 and 2002, it declined by 2 per cent between March 2004 and April 2005.

Zachariah believes the initial lack of players and a subsequent "lack of intensity" among the existing players is to blame for the malaise. And he's determined that Zero will not be guilty of apathy. With a marketing budget of over Rs 2 crore, Zero has been advertising on niche TV channels, upscale magazines and even on the boarding passes of private airlines.

That's quite a difference from the way sweeteners used to be marketed: through pharma companies' representatives, and point-of-sale promotions at chemists. The reason is simple: while diabetics are a natural consumer group for Zero, Alembic isn't counting on just them. It's targeting the upper socio-economic category people who're conscious about their health and have an interest in fitness.

This is also the target group that is likely to be aware of Splenda, the American zero-calorie sugar substitute that's become a runaway success. Splenda's success is entirely based on its taste "" unlike traditional sweeteners that are made from aspartame or saccharine, it is based on sucralose, the only non-caloric sweetener made from sugar.

Like Splenda, Zero is also a sucralose-based sweetener, so Alembic is hoping the familiarity factor will help boost sales.

Vikas Mehta, brand director, Leo Burnett, the agency that developed the campaign says, "We had to differentiate Zero from other low-calorie sweeteners." Hence the adline: Made from sugar. But has no calories.

The product formulation is likely to be Zero's key differentiator. Zydus Cadila's Sugar Free and Merisant's Equal are aspartame-based, while Boots' Sweetex is made of saccharine. Zero's sucralose base, then, is not just a technical difference. While the others are table-top sweeteners, sucralose can be used in any cooking process.

That's not the only benefit Alembic is counting on. Over the past couple of years, there's been an uproar on the effects of prolonged use of aspartame and saccharine, which has also contributed to the decline in the market in India. Sucralose has US Food and Drug Administration clearance, and Alembic's advertisements mention that, along with the zero calorie information, of course.

Zero calories come at a price, though, which may leave a bitter taste in consumers' mouths. "Sweeteners are three to four times more expensive than sugar," agrees Merisant's Sehdev, adding "Consumers pay a premium for a healthy option. So, it is value for money."

Natural sweeteners like sugar, honey and gur are several times cheaper than the artificial substitutes in the market.

A 90-tablet pack of Zero is priced at Rs 60, which is more expensive than other sweeteners in the market: Sugar Free and Equal carry price tags of Rs 128 for 300-pellet packs (both offer 50 or 60 pellets free). Zachariah admits that Zero is more expensive than the rest, but points out that sucralose is 600 times sweeter than sugar "" so consumers actually need to use less.

Zero may not be offering free tablets or price-offs, but it is making its presence felt in the market. Consumer promotions, event sponsorships and roadshows across the country ensure trial purchases, even as the advertising campaigns build up visibility and brand recall.

Meanwhile, it's not as if the other sweetener brands haven't been stirring up the market. While Merisant continues to target diabetics and health-conscious people, Sugar Free sidled over to the lifestyle platform last year, signing up celebrities like Harsha Bhogle and Raveena Tandon to endorse the brand.

"We wanted to reposition Sugar Free as a lifestyle brand and the preferred choice of the health conscious," says Jyoti Shiralee, general manager, marketing, consumer division, Cadila Healthcare.

Attempts by Merisant and Cadila to expand the sweetener market by introducing low-calorie drinks, though, haven't really worked. In 2000, Merisant launched Flix, an aspartame-based drink, but withdrew it two years later. Similarly, Cadila launched SugarFree D'Lite a couple of years ago.

D'Lite hasn't really taken off, but at Rs 26.45 crore, Sugar Free is still the market leader (source: Pharma ORG). Equal is at Rs 5.2 crore, in a market estimated at Rs 40 crore.

Of course, these figures perhaps don't reveal the true picture, since they consider only chemist sales, excluding sales at grocery store and supermarkets. But even so, Zero may have to really struggle before it tastes sweet success.