Sugar Tax Food Coca-Cola

A sweet deal: Could Coca-Cola and others use the sugar tax to embrace health-conscious messaging?


By Rebecca Stewart, Trends Editor

April 6, 2016 | 8 min read

With brands up in arms at George Osborne’s plans for a sugar tax, we explore whether marketers should be using this as a wake-up call to take up the mantle to sell consumers a sweet dose of reality, with a more positive approach and health-conscious messaging.

Sugar tax brand marketing

There’s no denying Britain has a sweet tooth. A recent World Health Organisation report suggested 16 to 17 per cent of the average UK consumer’s daily calories come from sugar – more than three times the recommended daily amount for adults. The effects are clear: an obesity study conducted by Imperial College researchers has predicted that that almost four in 10 people will be obese by 2025, making Britain the fattest country in Europe.

But how do you solve a problem like sugar? You tax it, or so the UK government thinks. In his 2016 budget, chancellor George Osborne unveiled a new sugar tax for soft drink brands selling high sugar products, like Coca-Cola. The proposed scheme will fine drinks giants on the volume of sugar-sweetened products they make or import at the rate of 18p and 24p a litre.

Due to arrive in 2018 following a series of consultations, the levy for beverage-makers has been divisive to say the least, with the Food and Drink Federation slamming what Osborne described as the “right thing for our next generation” as a “piece of political theatre."

Irn-Bru maker AG Barr initially called the decision “extremely disappointing,” but has since said it will substantially reduce the sugar content of its drinks due to a decline in revenues. Others such as Lucozade have followed suit, but ill feeling towards the tax has accelerated among some, with several big name brands poised to sue the government over the move, which one senior industry source claims was “rushed through without warning.”

Fearing a dip in sales, companies are on the defensive – but should they instead use this opportunity to harness the impact their marketing has on consumer attitudes and take more risks to show kids that a healthier diet can be cool?

Indeed, sugar is already higher on the public radar than ever before; consumer research from Mintel in 2015 found that 46 per cent of Brits have taken at least one course of action to monitor or reduce their sugar intake in the previous 12 months.

The Drum caught up with marketers to find out what role marketing can play when it comes to changing attitudes around health, and how they can build trust in their product by entering the public dialogue on the issue.

Shepherd Laughlin, director of trend forecasting, JWT Worldwide

In general, in the past few years we’ve seen the growth of a movement against unhealthy eating that has acquired the sort of urgency that in previous decades characterised the ‘war on cancer’ or reducing smoking. People are particularly concerned about the effects of sugar on children: this goes from Jamie Oliver’s Food Revolution Day to Tesco banning lunchbox-size packs of sugary drinks like Capri-Sun and Ribena.

In research for our recent Food and Drink Futures report, we surveyed consumers and found that millennials in particular were interested in the connection between food brands and health. While wary, they were also more likely to say they trusted brands to help correct the problem: 73 per cent of US millennials said they trust research on diet and health that is sponsored by large food brands, and 93 per cent said they would support a food brand that helps our society become healthier.

As millennials become parents there’s huge opportunity to position brands as partners in healthy eating and supporting healthy families.

Jon Sharpe, chief executive, RKCR/Y&R

A cure for Britain’s sweet tooth or a tax on fizz and fun? The sugar tax has proved divisive. Sugar-sweetened drinks are the largest single source of sugar for children and teenagers and the stepped levy is a landmark moment in how we approach the nation’s obesity, with the money raised earmarked for measures to encourage children to be healthier by promoting school sport and breakfast clubs.

What’s more, the tax, at its worst, is being tarred as being regressive – serving to penalise the poorest in society who are the heaviest consumers of high sugar drinks.

Brands have an opportunity, in the two years before the sugar tax kicks in, to carve out clear ground by leading with broader behavioural initiatives that help consumers to adopt healthier lifestyles. We only have to look to supermarkets’ move to ban guilt lanes of confectionary at the checkout to see how simple nudges can create real impact. Rather than being seen as just faceless conglomerates adhering to state intervention, they can genuinely empower consumers to actively make choices, not begrudgingly roll along.

One tax change won’t solve the problem alone, but if brands can lend their weight to making the public’s healthy choices easier, Britain can get one step closer to kicking the habit for good.

Niccolo Rigo, strategy director Europe, Naked Communications

The sugar tax is giving brands a chance to be honest with consumers. Let’s start by being honest with ourselves: many of these brands’ marketing efforts over the last decades have been invested in making people look away from the potential harm caused by their products.

Now the government is giving these same brands a reason to change and say to their customers: ‘we are doing something that is truly good for you and your health’. How could this be anything but an opportunity for brands who actually care about their customers and want to build an honest relationship with them? Brands that are authentically invested in their customers’ wellbeing can only thrive from this move. Brands that have made – and plan to keep making – success off the back of products that are unhealthy will not.

When Tizer tweaked its recipe to use fewer additives and use real fruit juice in 2007, customers were turned off and the recipe was switched back. Now, people’s decision drivers have shifted: 43 per cent of Cokes sold are lower sugar options.

The sugar tax is a sign of a bigger shift that brands should accept and embrace – many of them already have. The future is for brands that are authentically invested in the wellbeing of their customers.

Jon Kershaw, managing partner, strategy, Havas Media

The sugar tax offers a fantastic opportunity for brave brand owners to build more meaningful connections.

As brand owners reformulate their products to create great tasting, lower sugar drinks, smart marketers will use this new news to stimulate trial and grow market share.

Reformulated products will help people reduce their sugar intake without compromising on taste, enabling soft drinks brands to more credibly associate themselves with active lifestyles and enhanced personal wellbeing.

By funding school sports clubs across the country soft drinks brands will also directly fuel children’s health and happiness, binding them even closer to the nation’s heart. Sweet.

This feature was first published in The Drum's 6 April issue.

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