Lily’s Sweets expands into low-sugar gummies

Dive Brief:

• Lily’s Sweets has launched its first nonchocolate product, Lily’s Gummies. Available in Sour Gummy Worm and Gummy Bear varieties, the stevia-sweetened gummies contain less than a gram of sugar and are gluten free and non GMO, and naturally colored and flavored.
• Sour Gummy Worms are available in two flavors — lemon-raspberry and apple-peach — while the Gummy Bears include strawberry, orange, lemon and raspberry flavors. The gummies are available at Walmart and on Lily’s website for $2.78 per 1.8-ounce pack.
• Lily’s, which Hershey announced it was acquiring this past May, is aiming to apply its better-for-you formula to the growing gummies space, where new and familiar players are vying for consumers’ attention.

Dive Insight:

Since its launch at Whole Foods in 2012, Lily’s Sweets has grown its portfolio of low-sugar chocolate style candy to include bars, peanut butter cups and baking chips. This latest product launch expands its reach to the gummy candy segment, which is the main growth driver in nonchocolate chewy candy, and is projected to reach $40 billion in global sales by 2024 with a 5% compound annual growth rate, according to Market Research Future.

While it will not be the first sugar-free gummy candy on the market, Lily’s line would benefit from the retail and logistical backing of Hershey. And with Lily’s latest launch, Hershey is furthering its reach into the better-for-you confections category. The segment has become a top priority for the candy and snacks giant after CEO Michele Buck took over in 2017. The company recently rebranded its sugar-free line to include Zero Sugar Jolly Ranchers, Hershey’s bars and Reese’s Peanut Butter Cups.

Earlier this year, the candy and snacks giant told Food Dive that it projects that if better-for-you’s share of candy sales rose from its current 6% share to 20%, it could rise beyond $4 billion in annual sales.

Hershey has also invested in Bonumose, a startup developing plant-based ingredients such as natural sugars, which could also support its growth in this segment. According to a recent Mintel study, naturally sweetened, low-sugar snacks such as Lily’s are nearly four times more profitable than artificially sweetened low-sugar snacks.

Lily’s gummies are sweetened with a mix of stevia, allulose and erythritol. Fruits and vegetables such as apple, blackcurrant, pumpkin, carrot, spirulina, saffron and radish provide color and flavor.

The gummy sector Lily’s is entering has seen a flurry of activity from established names like Haribo and Trolli, as well as many startups. Brands like Mars Wrigley’s Starburst, Bazooka’s Ring Pop, and Jelly Belly have entered the space, reimagining their flagship candies in new gummy forms. This year’s Sweets & Snacks Expo also saw several new better-for-you gummy offerings, including vegan gummy bear brand VegoBear made from fruits and vegetables, a naturally sweetened gummy bear from Albanese Confectionery Group, and Jealous Sweets’ line of plant-based gummies. 

A few startups also offer low-sugar gummies, including Project 7 and SmartSweets, which are sweetened by stevia. With Hershey’s backing, Lily’s would have a leg up in this highly competitive space.