There’s no denying that Britain’s consumer tastes are set to change in 2016. Last week’s sugar tax announcement by the Chancellor, campaigned for by the likes of Jamie Oliver and aimed at reducing childhood obesity, took many soft drink manufacturers by surprise.
As we wage the war on sugar, tighter legislation governing the advertising of sugary foods to children across all media is also expected to follow – a move that is strongly opposed by The Advertising Association.
So, just how do you insulate your sugary drink sales from a colossal shift in consumer attitudes in record quick time? To most, this poses far more than a marketing challenge. Communicating the benefits of a high sugar product is easy. Leveraging brand equity enough to launch new products will mean that many brands are about to stand the ultimate test of time.
Brand evolution is key to riding the sugar tax wave. Embracing the new legislation and seeking out new routes to market will allow sugary brands to continue to adapt and grow.
Some brands have made a start, with the likes of Coca-Cola’s ‘Coke Life’ launched in 2014, and relaunched with even fewer calories in January. Made from so-called natural sugars and sugar alternatives such as agave syrup and stevia, it ticks the post sugar tax box and allows Coke to drive sales forward with a consumer-friendly product without wasting any time. So far, it seems to be working. Coke Life has generated £16.1m since it hit the shelves nearly two years ago.
Stevia couldn’t save Sprite’s falling sales though. Added to the recipe in March 2013, the sweetener lowered Sprite’s sugar content, but unfortunately it had the same effect on sales.
Sugar tax introduction
Mexico introduced a sugar tax on fizzy drinks in 2014 and recent BMJ data suggests that sales nose dived by 12% in its first year alone. This presents the industry with a hard-hitting case study, and the realisation that a sugar tax will mean they’ll suffer a downturn.
It appears that offering consumers a low sugar alternative is a must. With purchasing power in their hands, they will make their own informed decision based on what brands are prepared to tell them about the contents.
If there is a lesson to be learned, it is that unforeseen change in industry direction can push brands to the limits and even lead them to question their existence in the marketplace. The quick thinkers and the innovators will lead the way forward as the sugar tax takes hold. Whatever your industry, it certainly pays to future-proof your brand and know the ways you can adapt and grow in accordance with more frequent social and market changes as they happen.
Article originally written as part of Nuance & Fathom’s portfolio.