Global Soft Drinks in 2022: Alternative Approaches to Sugar Reduction

February 2022

Taxation on sugar-sweetened beverages in key markets, coupled with changing consumers tastes and attitudes to nutrition are beginning to address the question of sugar content in the industry. This report explores alternative sugar control strategies in global markets, ranging from advertising restrictions to warning labels on packaging. The changing channel landscape and occasions for beverages - particularly more at-home consumption - could also have an impact on sugar consumption from drinks.

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Key Findings

Changing consumer preferences and tax regimes are contributing to declines in sugar consumption and growth in reduced sugar drinks

Consumer awareness of the high sugar content of many soft drinks (and the negative health impact of excessive sugar consumption) continues to grow and shape the global industry outlook. In 2022, over 50 countries and many more local or regional authorities have implemented taxes on the production, distribution or sale of sugar-sweetened beverages. Suppliers have responded by reformulating existing brands and introducing no or low sugar alternative products, contributing to a reduction in the global sugar consumed from soft drinks over the last five years.

New efforts to reduce sugar-sweetened beverage sales will likely focus on restricting marketing, merchandising and packaging

As a result of the global COVID-19 pandemic, consumers remain closely focused on issues of health and nutrition, while global public health regulators potentially emerge empowered to introduce new or enhanced controls on sugar consumption from food and beverages. While tax legislation on sugar-sweetened beverages (SSB) have attracted the most attention to date, this report explores the alternative options, including restrictions on the sale of SSBs to certain age groups, channel prohibitions and enforced changes to beverage packaging and marketing.

The changing channel landscape for beverages could also impact sugar and nutrition, as more occasions move into the home

Another long-term consequence of the pandemic on the industry has been a radically different channel landscape, with far more beverage occasions expected to take place inside the home. This aligns with industry sustainability objectives. Less packaging - or package-free beverage products - could also yield less sugar per beverage serving because investment in home carbonation systems and water purification systems are likely to reflect and accelerate long-term consumer trends in packaged drinks: far more water (plain, sparkling or flavoured), alongside coffee and tea.

Introduction

Scope
What is this report about?

Moving the Needle on Sugar Consumption

Is the soft drinks industry finally moving the needle on sugar?
Several factors have yielded declines in estimated sugar from retail soft drinks globally
Consumer sugar avoidance in beverages is growing - and is higher than foods
Action in 2021/2022: Poland and Spain push forward new tax increases on SSBs
Sugar reduction and the post-pandemic consumer
What do we mean by tax alternatives?

Limiting Access and Visibility to Sugar-Sweetened Beverages

Legislation limiting access to sugar moves ahead , beginning in Oaxaca
Is self-regulation enough to limit access to sugar-sweetened drinks?
2022: more restrictions across institutional channels, workplaces and foodservice menus
Future channel restrictions modelled on tobacco and alcohol industries
Restricting the public profile of beverage brands via event marketing and sponsorship

Warning Labels and Plain Packaging

Nutrition-specific labels vs indicator-based labels to inform consumers
Stop sign front labelling is used as a model for Latin America, although impact is mixed
The role of embedded brand equity in a plain packaging world
Tobacco’s plain packaging and health warnings: a model for the future?
Quantifying the impact of plain packaging on beverage category value
Smaller portions, smaller package sizes and higher margins

Sugar Reduction Through Package-Free and Functional Occasions

Growth in countertop beverage preparation could also yield declines in sugar per serving
As functionality replaces refreshment, sugar may no longer be the most important ingredient
The role of sugar in soft drinks will change with the consumer’s mission
Conclusion

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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