Drinks From coffee and kombucha to seltzer and champagne, we explore the latest insights on the consumer trends and new products shaping the drinks industry.

Beyond Sugar Taxes: Alternative Approaches to Sugar Reduction in Global Soft Drinks

3/7/2022
Erwin Henriquez Profile Picture
Erwin Henriquez Bio
Share:

While taxes on sugary drinks are generally a more recent trend, Finland started levying an excise duty on such products in 1940, and Norway first implemented a tax on soft drinks in 1981. Currently there are over 50 countries with taxes on the production, distribution or sale of sugar-sweetened beverages as a means of combating the potential adverse health effects of sugar. The mixed results of taxes on reducing sugar intake, however, have governments considering alternative approaches.

Evidence from a recent study from the University of North Carolina at Chapel Hill, shows that combining written and graphic health messages (pictures) on the packaging of drinks is more effective than text-only warnings to reduce the consumption of sugary drinks.

Another study from Aberdeen University found that restrictions on promotions, ie, buy-one-get-one-free, are often more effective than taxation to reduce consumption. However, studies state that the efficacy of such measures depends on multiple other factors, and that sugar reduction should be seen as a multidimensional problem.

Marketing, merchandising and packaging will be the new frontline for sugar reduction

The global COVID-19 pandemic has consumers striving for health and wellbeing. According to Euromonitor International’s 2021 Health and Nutrition Survey, 28% of global survey respondents seek to avoid sugar through beverages. While taxation has been the primary approach over the last decade, public health regulators and companies are exploring three alternative strategies.

Restrictions on availability and marketing

Restrictions on the availability of sugary drinks in schools and healthcare facilities have proven effective, and soon on-trade and retail channels could be potential targets for restrictions. However, the pandemic has shown that consumers are quick to adapt to new channel distribution and can change their consumption accordingly.

Prohibiting on-pack advertising and brand packaging through "plain packaging"

Warning text labels have already impacted consumption in Latin America, forcing companies to move ahead with reformulations to reduce sugar content. Another industry alternative focuses on packaging changes to reduce portion sizes. More extreme measures could be brought forward following the example of plain packaging in the tobacco industry – advocates such as the IPPR (Institute for Public Policy Research) in the UK support this type of measure for the drinks industry.

Countertop commerce, home preparation and the new role of sugar

At-home preparations could help reduce sugar consumption by migrating consumers away from drinks with high sugar content. On the other hand, the role of sugar continues to change in the assortment of consumption occasions, and the desire for sugar reduction is unlikely to be uniform throughout the day. Companies addressing those new need-states will find it easier to reduce sugar.

For more insights on how the industry is approaching sugar reduction and the potential impacts of alternative legislation please see the full report, Global Soft Drinks in 2022: Alternative Approaches to Sugar Reduction.

 

Interested in more insights? Subscribe to our content

Shop Our Reports

(Animal-free) Cream in Your Coffee? Dairy Alternatives in the Coffee Space

The overlap between coffee and dairy, especially in the critical coffee markets of Asia and North America, means that trends in plant-based dairy will play a…

View Report

Irish Whiskey: From Renaissance to Maturity?

Despite a rebound in 2021, notably in the US, Irish whiskey may be increasingly challenged by RTDs and world whiskies. A more diverse geographic reach could…

View Report

Wellness: Longevity and the Quest for Healthy Ageing in Asia Pacific

Wellness has been identified by Euromonitor International as having the furthest-reaching impact on industries and consumers in the future. This report looks at…

View Report
Related Content Global Soft Drinks in 2022: Alternative Approaches to Sugar Reduction Learn More