UK sugar tax comes into force: Key suppliers react to levies, as low sugar claims strongly influence purchases
06 Apr 2018 --- Today marks the start of the long-awaited sugar tax on soft drinks in the UK – and as consumers brace themselves for price rises, the burning question is “What impact will the implementation of sugar levies have on consumption?” And as industry monitors early reaction over the next few months to see the choices UK consumers make, Innova Market Insights has carried out a survey examining what factors influence consumers by when making soft drink purchasing decisions.
As the sugar tax begins, this insightful data gives manufacturers a snapshot of what is essential to consumers.
Click to EnlargeThe UK’s sugar tax pushes up the price of sugar-sweetened soft drinks across Britain. It has two tiers; a lower rate of 18 pence per liter for beverages with a total sugar content between 5-8g per 100ml and a higher price of 24 pence per liter for drinks with total sugar more than 8g per 100ml.
In Ireland, a planned sugar tax will not come into effect until May 1, almost a month later than today (April 6) when it was initially scheduled to start.
FoodIngredientsFirst has gathered the thoughts and opinions of several leading suppliers who have, for the most part, already carried out the bulk of the work regarding reformulation in preparation for today’s landmark sugar tax enforcement.
In fact, according to the UK Treasury estimates, 50 percent of manufacturers have already reduced the sugar content of their drinks.
Prime Minister Theresa May introduced the levy as part of the Childhood Obesity Strategy in a bid to change the consumption habits of children across the country as the latest statistics reveal Britain has a big problem with overweight and obese kids. Excessive sugar consumption, much of which comes from soft drinks, is being blamed for the crisis.
However, some observers claim that due to the aggressive reformulations that have already taken place within the soft drink sector, revenues collected as a result of the additional tax, may not be as high as first anticipated.
At Kerry, the sugar tax is one of the drivers behind the shift in consumer soft drink trends.
“The soft drinks market looks set for growth in 2018 and beyond, development and innovation will be driven by consumers’ changing flavor preferences, the trend to consume less alcohol and the introduction of a “sugar tax” in many European markets,” said John Kelly, Senior Marketing Manager at Kerry.
“Traditionally, high-intensity sweeteners have been used to reduce sugar, but many of these are now on consumer “no-no” lists and have been red flagged by consumer advocates and bloggers.”
“In addition to consumer perception, while returning perceived sweetness, they cannot deliver the lost functionality, taste and mouthfeel of sugar. This provides an opportunity for innovative food and beverage companies.”
To address the issues, Kerry has created a new product called TasteSense Sweet – a natural flavoring solution which builds back the sweetness that is lost when sugar is reduced, allowing consumers to enjoy the taste and mouthfeel that sugar delivers, without the negative labeling impact.
Frank Maus, Category Lead Sweeteners EMEA at Cargill, agrees that it’s all about reformulating to reduce sugar and overall calories, this can never be at the expense of taste.
“Calorie reduction in beverages remains a hot topic. This is driven by a combination of factors, including evolving consumer attitudes around sweetness intensity and sweeteners of choice, global regulations and taxation on the sugar content of beverages,” he said.
“While consumer scrutiny of product labels and calorie count shows no sign of abating, we can’t lose sight of the importance of taste. Taste is, and will remain, the single biggest driver of purchase intent.”
Sweetener manufacturer and supplier Hyet believes singling out sugar is not necessarily the answer to solving obesity issues.
“Sugar replacement is an issue that everybody in the industry is dealing with. However, criticism of an individual commonly present ingredient is not the answer to solving the nutritional challenges that the western world has to solve,” said Lex Van Houten, Marketing and Communications Manager.
“The problem of approximately 50 percent of all adults (and nearly the same share among children) is the overconsumption of calories. This is a multi-causal phenomenon. Portion size, 24-hour availability of food and drinks, affordable prices, multimedia advertisement and product innovations are only some of the reasons why an oversupply of energy intake is so easy today.”
“Criticizing sugar alone will not solve the challenge as neither did the bashing of fat in previous decades. The strongest and positive impact is realized by calorie free (low) products, like high-intensity sweeteners and other sweeteners, matching the customer expectations.”
“Consumers should be informed that an excessive intake of calories over a long period, may have the quality of life-impacting consequences. Thus, saving calories on a daily basis with products that are integrated into daily life are the better option. This is where zero-calorie and low-calorie food products can help them to achieve a balanced lifestyle.”
Meanwhile, Produce Manager of Sweeteners, Kristine Van Den Steen from Tereos – a cooperative sugar group which processes agricultural raw materials into sugar, alcohol and starch – says the implementation of sugar taxes is already having an impact and believes more levies could be on the cards.
“The search for affordable alternative food ingredients of a natural origin has started. What is proven is that taste remains key, meaning that consumers will have to pay more for a good tasting full sugar product, if the low-sugar alternative does not succeed in meeting their expectations.”
You can read FoodIngredientsFirst report on the sugar tax which was published earlier this week, here.
By Gaynor Selby
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