In a world where conscious consumerism is now rife, food and beverage industry trends in 2019 have repeatedly been moulded by a vast increase in demand for health and wellness products.
A 2019 study by researchers from Harvard T.H. Chan School of Public Health, Huazhong University of Science and Technology in China and the University of Calgary in Canada, found that ‘just one sugary drink a day’ linked to health problems including an increased risk of early mortality in US adults.
Perceptions of sugar are changing rapidly, and fizzy drinks contain some of the highest sugar levels of any food and beverage product. Just one can of Coca-Cola or Pepsi contains around 40g of sugar, yet the World Health Organisation recommends just 25g per day for each person.
Consumers are no longer looking to get their fix through sugary snacks and drinks, but instead, are turning to healthier options or low and no-sugar alternatives. The low-calorie sweetener industry is expected to reach $2.2 billion by 2020 worldwide.
Whilst for some this is a conscious choice, recently national medical associations and the World Health Organisation have promoted ‘soft drink taxes’ in order to discourage unhealthy diets and ultimately crack down on burgeoning economic costs of obesity.
Within the past 10 years, European countries such as Finland, Hungary and France have introduced soft drinks taxes, coinciding with growing trends of healthy living. Denmark has been taxing soft drinks and juices since the 1930s.
The UK introduced the sugar tax on soft drinks in April 2018, making them one of the most recent countries to bring in such a tax. According to WorldAtlas, the average amount of sugar consumed by those in the UK exceeds recommended levels at around 93.2 grams. The average amount of sugar people of the US consume daily is 126.4g.
FoodBev has taken a look at how the US and the UK compare in terms of their policies and action taken towards reducing sugary drink consumption.
US
The Harvard School of Public Health listed sugar-sweetened beverages as the single largest source of calories and added sugar in the US diet. A number of recent studies in the US have provided strong and consistent evidence that links the intake of sugary beverages with adverse health conditions such as type 2 diabetes, heart disease and strokes.
The previously mentioned study, led by Harvard T.H. Chan School of Public Health, found that drinking one artificially sweetened a day, rather than a sugar-sweetened beverage, lowered risk of premature death. Drinking one or two sugary drinks a day increased the risk of premature death by 14%, and by drinking two or more a day this increased to 21%.
With such conclusions coming out of reliable studies, there is no wonder action has been taken by associations within the US to help reduce sugar consumption in the country. William Dermody, of the American Beverage Association, stated, “we drive toward a goal of reducing beverage calories consumed by 20 percent by 2025.”
Currently, whilst there has been an increase in debate in cities, states and even Congress, there is no nationwide soft drinks tax in the US. However, in November 2014, Berkeley in California became the first US city to implement a taxation of sugary beverages; taxing one cent per ounce of sugar. Studies have shown that, depending on the examination period and methods used, the tax has resulted in a 9.6-52% drop in sugar consumption.
As of March 2019, the American Academy of Pediatrics and the American Heart Association released recommendations in an attempt to encourage federal, state and local lawmakers across the US to implement policies aimed at reducing the amount of sugary drinks in children’s diets.
These recommendations included a tax on sugar-sweetened beverages, a decrease in the marketing of sugary drinks, federal nutrition assistance programs that ensure access to healthy foods and regulations requiring added sugar content to be included on labels, menus and adverts.
By targeting sugary beverages in order to reduce the amount of sugar consumed in the US could undoubtedly lead to potential health improvements for the people of the country. However, another governmental incentive of a nationwide soft drinks tax could be the $14.9 billion the US Department of Health and Human Services reports it would generate in the first year alone.
The strong consistent evidence that the intake of sugary beverages can lead to negative health impacts cannot be ignored. There has been a call to action within the US and cities such as Berkeley, and now Philadelphia in 2017, have taken steps towards reducing sugar sweetened beverage consumption. The government has evidently had discussions around the topic but only time will tell if any national measures will be carried out.
UK
In October 2013, a study was published in the British Medical Journal theorizing that putting a 20% tax on sugar-sweetened beverages in the UK would help target population obesity and reduce obesity levels by around 1.3%.
Hence the UK Government’s introduction of a sugar tax in the 2019 United Kingdom budget. The tax, officially named the “Soft Drinks Industry Levy”, was effected on the 6 April 2018 and put a charge of 18p on drinks that contain 5-8g of sugar per 100ml 24p on drinks that contain over 8g of sugar per 100ml.
Kate Smith, senior research economist at the Institute for Fiscal Studies, claims that one year on, it is still too early to tell the effects the levy has had on the consumption of soft drinks, prices and health data. However, the measure has been estimated to generate around £1 billion a year in additional tax revenue, which will be spent on funding sports throughout schools in the UK.
Since the soft drinks tax was introduced, there has been a clear rise in the number of sugar-free and low-sugar offerings from beverage brands in the UK.British brand Fentimans launched a new light soft drinks range in July 2019, and A.G. Barr cut down the sugar content in Irn-Bru significantly ahead of the implementation of the tax.
In July 2018, three months after the soft drinks levy was put into effect, accountancy group UHY Hacker Young reported that 326 UK beverage businesses were affected by the tax. They suggest the sugar tax adds to the ‘burden of cost and red tape for businesses’ but says soft drinks manufacturers have responded positively by reducing sugar levels in drinks which ‘makes sense financially, given the potential cost of the levy.’
Some have criticised the UK soft drinks tax, with the University of Glasgow study claiming a focus on sugar misleads consumers and takes away from the importance of reducing fat consumption in tackling obesity. Others, such as Professor Robert Lustig, think it should go further by taxing juice as well as soda.
Conclusions
Unlike the US, the UK tax is nationwide and although it would be harder to implement on such a scale in the US, due to it being much larger, the country is unlikely to see reduction in population obesity without going to national measures. If such a tax is put in place across the US, it will be interesting to see if the effects and responses from US drinks manufacturers will be similar to those in the UK.
Taxes on sugar-sweetened beverages have become increasingly popular around the world over the past ten years and beverage brands are responding to this by releasing more sugar-free and low-sugar beverage making it a major trend in 2019.
The effects of soft drink taxes have impacted beverage innovation, as it ultimately pushes beverage brands to reformulate their products. For instance, there has been a stark increase in the number of naturally sweetened zero sugar sparkling waters Cleary Drinks Upstream range, for example, offers a healthier alternative to fizzy pop to meet consumer demands for lower-calorie beverages.
Big beverage brands such as Coca-Cola are even hopping onto the trend, releasing zero-calorie, zero-sugar option of it’s new energy drink. It is likely that we will see even more beverage brands bringing out low and no-sugar innovations over the next year in order to stand out from the crowd whilst aligning to these trends.
Think your beverage brand has an innovation that is worthy of an award? Enter the World Beverage Innovation Awards 2019 now to gain global recognition and enhance the promotion of you brand!
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