Advertising Brand

The looming threat of plain packaging puts big brands on notice to do the right thing

By Richard J. Hillgrove VI | Founder

December 13, 2017 | 8 min read

Our addictions are under fire as governments finally see the sense of following the tobacco lead and regulating products that are bad for us. About time.

plain packaging on the way?

Big global brands will take a massive hit if health campaigners push through plain packaging, as they have with tobacco in the UK, but it’s the consumer who pays the real cost right now, with their health.

Brands may argue they give people what they want, but the freedom of choice defence carries no weight when it comes to tackling obesity.

We all know the addictive nature of sugar and junk food. Addicts don’t act out of choice but out of compulsion. Where’s the integrity in feeding that addiction?

We’re waking up to the new rally cry of “Sugar Kills” and big brands like Coca-Cola and Pepsi should be worried.

If a plain-packaging Armageddon happens and Brand Finance’s latest predictions are right, the beverage industry alone could face a whopping $293bn (£217bn) loss in the value contributed by its brands globally.

And that’s “quite conservative”, according to David Haigh, Brand Finance’s chief executive.

Its figures show that the soft drinks giant Coca-Cola is already on the back foot. In 2007, it was the world’s most valuable brand across all industries with a value of $43.1bn. This year it was down 7% and relegated to 27th place with a brand value of $31.9bn.

The reason? Concerns over the links between high-sugar carbonated drinks and obesity and the company's failure to address those concerns in any major way with initiatives like Coke Zero and Coke Life.

Pepsi is suffering from the same trend, falling 4%, and so is the fast food industry. The brand values of McDonald’s, KFC, Subway and Domino’s have all fallen as consumers make healthier choices.

Plain packaging might strip brands of their market prominence, but let’s be honest, it really can’t be OK to allow industries to spring up and prey with impunity on our addictions, be it to sugar, fats, gambling, alcohol or nicotine.

We’re wired to believe what’s advertised to us on primetime TV. It’s how our psychology works, and TV advertisers take full advantage to create full impact. As they say in the Fairy Liquid commercials, it really does last longer.

That’s why the likes of Jamie Oliver were so up in arms at Theresa May’s failure to curb the amount of junk food advertised to kids. New rules finally came into force in July to restrict ads for foods high in fat, salt and sugar in media aimed at children under 16.

The bad-for-you-and-me industries are all on notice. Soon, the supermarket shelves are going to look pretty bland as supermarkets’ own brand products are swamped by a tsunami of no-brand products.

On the front line of global brands aiming to stem the tide of rampant regulation is Japan Tobacco International, owner of Benson & Hedges, Silk Cut and Hamlet.

JTI warn that regulation creep won’t stop at fag packets: if brands don’t stand up and act, then alcohol, soft drinks and confectionery could be next.

It’s hard to see any cancer stick manufacturer managing to fire up the anti-regulation sympathisers anytime soon.

One thing is certain, sugar in its every shape and form is in the snipers’ sights now that the UK has the OECD medal for most obese country in Western Europe.

It’s nothing to be proud of. A massive 26.9% of Britain’s population is now clinically obese. That’s still not as high a percentage as the record holder, the US weighing in at 38%, but it’s a 92% increase on the 1990s.

It’s also bankrupting the NHS. Obesity has been identified as the main cause of cancer, heart attacks, strokes and diabetes.

According to the World Obesity Forum, the cost of being the ambulance-at-the-bottom-of-the-cliff for all of this ill health will rise from $19bn to $31bn per year by 2025. At the current rate, 50% of us will be obese by 2050.

And yet only 13% of state schools make physical education compulsory. It’s sheer madness, but while kids aren’t getting enough exercise, what else can we do?

First comes the tax, like the UK’s sugar tax, which comes into force in April 2018. Plain packaging could easily follow.

But is this just gluten-free pie in the sky or the dawning of a new reality?

If other countries like Turkey are a sign of the times, alcohol could go the same way. Turkey has introduced graphic health warnings for alcohol.

Already, Scotland will become the first country in the world to introduce minimum alcohol pricing in May next year to counteract the adverse health effects of freely available cheap booze.

The move failed to cheer whisky manufacturers who lobbied hard against it. Their spirits – and profits – are sure to dip even more if warnings on bottles became the next step, as they’ve already introduced in Canada’s Yukon territory.

As for plain packaging, the thought’s enough to drive any alcohol manufacturer to drink, but that’s purely out of self-interest.

For the consumer, regulation can be a good thing. Iceland has turned its alcohol problem around in the past 20 years. Now its young people have gone from the heaviest drinkers in Europe to the lightest.

Iceland imposed 'common sense laws'. They set a curfew for young people which meant they had to be home by 10pm in winter and midnight in summer.

Every day after school, young people attend clubs for arts, crafts or sport with not an iPad in sight. On the flip side, Iceland has the highest internet penetration per capita in Europe.

It’s not rocket science, but a little regulation has done a lot of good in Iceland.

The stampede to save humanity isn't stopping with food and drink, either. It includes data.

The imminent arrival of the GDPR in Europe in May 2018 has already put a spoke in Facebook’s wheel. People’s right to privacy would mean Facebook’s new AI app that trawls your posts and video comments for suicidal tendencies will be a big no-no.

I imagine that GDPR will also ruin Facebook’s other plan to push data on individuals through facial recognition technology to upmarket store assistants. Both will end up the same way, down the YouTube.

There’s a new zeitgeist taking hold, and any industry that doesn’t have their consumers’ best interests at heart is on notice.

Brands would do well to wake up to the inevitable now, use their cash piles to diversify into industries that help humanity rather than destroy it.

There’s not much proof that plain packaging is on the agenda for anything other than tobacco anytime soon in the UK, but we’ve merely dipped our toe in the water. The tsunami can strike at any time.

Bang On to Richard on email and Twitter @6hillgrove

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