Abstract: Fat in a confectionary chip is reduced to below about 10% by using a low-fat insoluble, non-gummy food material and 40-70% small particle sugar (less than 100 microns) in combination with about 13% moisture. The sugar to non-gummy food material ratio must be between 2:1 and 4:1 and the moisture between about 10% to about 15%. Hydrated food ingredients are added to retain at least some of the moisture in the bound state. Other ingredients which may be added to the formulation include syrups, milk solids and starch. The chips can be made by simply blending the dry ingredients and adding the moisture to form a dough in the form of a dry, crumbly paste. The dough is mixed or worked up well and then formed into the desired shape. The shape is then cut into pieces similar to chocolate chips.