Another factor in the sugar free anything market is the overall gain in product sales. Say sugar free Skittles is introduced and it makes up 10% of all Skittles sales. But 80% of those sales are by those who switched from buying regular Skittles, meaning the actual market gain was only 2% and a probable loss do to production and marketing costs.
What product manufacturers need to is a 10% (or whatever figure it may be) in additional sales to make the product worthwhile to bring to market.
Again, Coca Cola is a prime example of how this works. In their case fortunately, no doubt due to extensive and costly market research and test marketing came out slightly ahead. But unfortunately for Coke Zero lovers resulted in the loss of their favored product, and possibly in the future, the loss of Diet Coke.
Edit: Note that Coke Zero Sugar was undoubtably brought to market to fill in the gap due to poor or slowing sales of Coke Zero and Diet Coke.
"COCA-COLA CANNIBALISM: Diet Coke’s sister brand is pushing it closer to the brink of destruction
Kate Taylor Oct 25, 2017, 5:54 AM
Diet Coke sales dropped again in the most recent quarter.
Meanwhile, Coke Zero Sugar sales in the US grew after a controversial brand revamp — and, in some markets, began to cannibalize Diet Coke sales.
After a controversial brand revamp, Coke Zero Sugar is on the rise. Meanwhile, Diet Coke’s downward spiral continues — and its sister brand’s success isn’t helping.
On Wednesday, Coca-Cola reported better-than-expected earnings, with a 3% increase in North American sales."
“In the US, Coke Zero sales increased by 3.5% in 2016, compared with Diet Coke’s drop of 1.9% in the same period”.
Source: https://www.businessinsider.com/coke-zero-sugar-trumps-diet-coke-2017-10