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How coffee chains can stop the sweet taste of sugar turning sour for customers

Coffee chains are facing sugar scrutiny

There has been a media storm about the amount of sugar in drinks from leading coffee chains.

Action on Sugar's widely reported research found that two thirds of their sugary drinks had more than the daily allowance (about 7 teaspoons a day) and the worst offender had nearly four times the daily allowance. The best option was still about half the daily allowance. Not to mention these statistics don’t take into consideration people who add sugar afterwards as well.

The news comes at the same time as the steadily increasing pressure on the government rises and more people are asking them to take action and reduce the amount of sugar added to our food in general. The most popular suggestion is to place a sugar tax on high sugar content foods or in proportion to the percentage added sugar.

From a business perspective two main questions spring to mind:

1. What is the likely impact on sales from the disclosure of the high and unhealthy level of sugar in some signature drinks?

2. What should the coffee chains do about it?

The survey was about the sugary drinks within these chains so if the sale of sugary drinks declines and that of 'pure' coffee and tea increase then the impact of the disclosure is neutral, possibly slightly negative as there is high margins in the added syrup added to your cuppa. The danger is if the disclosure affects the perception of the brand. Some quick online surveys seem to indicate that people (approximately 78 per cent of them at least) already expect such large drinks to contain sugar.

The response of the chains has been muted, all of them saying they have either already started to, or are planning to, reduce the sugar in their 'indulgent' drinks. These drinks are viewed by the chains as occasional indulgences but the issue is some customers get accustomed to them or 'hooked' on them as high sugar has a direct hormonal and chemical effect on the body, leaving most of us feeling very pleasant.

However, if you go to their websites, you can see indulgent drinks promoted such as the "rich intense caramel or rose and pistachio mocha" on Starbucks' site, sweet and buttery food treats for Costa or the Butterscotch Latte and Hazelnut Hot Chocolate for the Wild Bean Café.

A muted response is probably the right way forward as, like most media storms, it quickly fades and the chains don’t want this to remain in the news for too long.

Another approach, which is still only embryonic at best, is for coffee chains to offer reduced sugar, or sugar-free options, for these sugary treats. This has worked very well for the soft drink industry where overall sales have either not dropped or even increased with the introduction of low/no sugar options. Now about 45 per cent of Coca-Cola consumption is from their alternatives and the company has even marketed its drinks to fit different personalities, such as Coke Zero (for macho men) or Coke Life (for the eco warrior). This might even stimulate sales and increase margins overall.

It would be good if coffee shops also played their part in enabling us to indulge our sugar addiction without suffering the negative effects. The soft drink industry has shown that it is possible and now it may be time for coffee chains to follow suit.

Jacques de Cock is a faculty member at the London School of Marketing

JD

Jacques De Cock

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