THE WAR ON SUGAR
By Gauthier Ajarrista
The war on sugar is raging. It’s being blamed for making us fat, sick, toothless and depressed – and costing healthcare systems a fortune. As the response to the global “diabesity” epidemic is scaling up, and with sugar now seen by many as the main culprit, manufacturers are standing to face ever-stricter regulations and fast evolving consumer tastes. For many big brands in the wake of decades of global growth built on the back of sugary drinks and snacks, this means potentially big trouble. Meanwhile, smaller businesses are popping up all over to take their slice of a new, sugar-free world with exciting innovation. This article explores the extent of the challenge faced by brands of all sizes as regulation increases and consumer expectations evolve, and looks at how they can adapt and prepare their businesses in changing times.
1. The big issue
With new shock headlines and alarming statistics released almost weekly, it’s no secret that the world is in the midst of a huge and growing obesity epidemic. The issue is showing no signs of abating, and has now expanded far beyond the borders of first world nations, as countries like China and India adopt western diets and lifestyles.
The explosion of illnesses associated with being overweight, including cardiovascular disease, diabetes and even cancer, are adding ever-greater strain to already struggling healthcare systems. While numerous and extensive campaigns and programs have fairly successfully drilled in the need for better diets and regular exercise, governments are still struggling to tackle obesity. They are faced with evidence that behavioural nudges and softer educational policies have thus far failed to eradicate the issue. With over 2 billion children and adults now obese around the world, and almost half of the UK population forecast to be obese by 2025, it’s clear that the time has come for bolder measures.
And after decades of indicting such suspects as saturated fat or salt, today sugar is the number one public enemy in everyone’s sights. Last year, 46% of Brits took measures to reduce their sugar intake, and that number can be expected to rise in the coming years.
Faced with a growing epidemic, the time has come for more drastic measures against obesity and diet-related illnesses – and sugar is first on the hit list.
2. Why this is important now
Governments are now looking at effective, rigid measures to no longer just encourage, but rather force people to change their sugar-consumption habits. The latest such initiative in the UK has been to follow the lead of countries such as Belgium, France, Hungary and Mexico in enforcing a ‘sugar tax’ on sugary-sweetened drinks, to take effect in 2018.
This has sent drink brands scrambling to anticipate the potentially bottom-line depleting effects of such a tax. Coca Cola has already taken to reducing the sugar content by as much as 30% in such best-selling drinks as Fanta and Sprite, while Irn Bru, Lucozade and Britvic have committed to similar reductions. In conjunction, these brands are moving further into drinks perceived as healthier, through innovation or acquisition, with things such as coconut or cactus water, iced tea, or other more esoteric concoctions fast launching on the market.
On the bright side for manufacturers, these initiatives are fuelling growth, as they’re not just responding to regulatory threats, but also catering to evolving consumer demand for healthier and more “natural” drinks. Furthermore, there are many who argue that the tax will have little to no effect, either on curbing obesity, or on sales themselves, and research indicates that the majority of those consumers already buying soft drinks would not be discouraged by the hike in price. However, there are strong indicators that the “war on sugar” is only just beginning.
The sugar tax may not seem like much, especially to consumers. However, there are signs that this could be just the beginning in a series of challenges and barriers for brands.
3. How this affects you
The comparison with the war on tobacco is one often made, and rightly so. As concrete evidence mounts that sugar is addictive, poisonous, and linked to several of today’s biggest health epidemics, it no longer seems farfetched to look a few years ahead and imagine a world where all high-sugar products are labelled with warnings, while adverts for chocolate bars warn us to consume them only in moderation. In fact, it’s just been announced that UK doctors are about to push for health warnings on sugary foods targeted at kids.
Already, retailers like Tesco have removed sweets and sugary snacks from their checkout areas, and have banned lunchbox formats of sugary drinks. Given the imperative of changing consumption habits in the population, one could also expect taxation to possibly increase over time to levels far beyond the current tax measure, spread across all possible categories. Indeed, it seems that the soft drinks sector won’t be the only one put under pressure, as government agency Public Health England has made it its mission to remove 200,000 tons of sugar a year from UK diets in general, and reduce sugar in food by 20%.
What’s more, forecasts all point to the strong likelihood that the children of today could grow up to be even more obese than what we see now in the adult population. As the challenge amplifies, so will the reaction. For example, with already two thirds of UK consumers thinking that high sugar and energy drinks should not be sold to children, and a majority of these being women – think mums – food and drinks brands catering to kids are already feeling the pressure, and can expect more difficult times in the near future.
It’s worth noting that there still remains a somewhat astonishingly low level of awareness amidst consumers regarding the sugar content of even leading products. For instance, in the UK only 46% of consumers are aware that Coke Zero contains no sugar, down to a staggering 30% for Diet Coke (the figures go even lower in the Pepsi camp). The fact that a giant such as Coca-Cola and its £30m a year UK ad spend are struggling to communicate on sugar shows the extent of the challenge faced by brands to efficaciously put across their efforts in cutting out the white stuff.
Meanwhile, 43% of these same consumers still believe that natural sugars, such as those found in fruit juices, are in fact better than added sugars. Without going into whether they might be right to think so or not, it’s increasingly being preached that, whether they bear the name honey or agave, brown or white, fructose or glucose, all sugars are out to destroy us. As this notion spreads, all the fruit juices and smoothies that have enjoyed strong growth thanks to claims of being healthier risk being thrown in with the same lot as sodas and energy drinks. Already, Brazilian orange growers are having to switch to other crops, as western consumers have lost their appetite for a morning OJ, chiefly driven by concerns around sugar.
While brands are preparing to work around the immediate challenge of the sugar tax, food & drinks manufacturers and even retail brands thinking on the long term must already prepare for more and potentially severe changes to come in market regulation and consumer attitudes.
As the crisis deepens and consumers and retailers alike begin to shun sugar, it could soon be facing the same fate as tobacco.
4. The solution
1. Be up for it
The first step for brands as they take on these challenges is to be proactive and positive about the changes they face, rather than begrudgingly work around obstacles as and when they arise. Consumers are increasingly interested in the connection between brands, products and their personal health. They are also more ready than ever to shun and condemn brands which they feel don’t take their wellbeing seriously. Right now, brands have the opportunity to place themselves on the right side of history, and be remembered as the ones that deliberately set out to help consumers and their families thrive and be healthy – not those who stood to keep them hooked on sugar. That means displaying a positive attitude towards change through every aspect of how both brand and business talk, and becoming a credible partner in the fight against obesity and unhealthy habits. A good example of this is McDonald’s, whose promising return to form after facing growing reproach from a more health-conscious public provides valuable pointers on how food and drinks businesses can adapt to such tougher times. Nonetheless, the extent to which McDonald’s had to transform their brand to reconcile themselves with consumers is a good indication of the difficult task ahead for many brands.
2. Be more transparent
As noted above, although sugar-free alternatives have been available for decades, consumers still don’t fully understand when they are and aren’t getting sugar. Whether through core brand values, design, or comms, food & drinks companies must find better ways of making it clear when they have removed sugar from their products. However, they must be careful not to talk too bluntly about sugar itself, weight-loss, or any of the more unpalatable topics surrounding this theme. Taking the example of packaging, clearer messaging around sugar can easily be achieved through visible text on back of pack, or even on front of pack through a discreet but recognisable label certifying sugar-free. Brands in the US have led the way here, with sweet favourites like Oreo and Reese’s sugarless variants boldly displaying “sugar-free” messaging. Coca Cola have also heeded the need for clearer messaging and recently amended their Zero variant to talk explicitly about sugar (or lack thereof). Of course, this can detract from premiumness or even feel a little brash – but the potential windfall to be gained from clearly indicating sugar-free credentials today cannot be ignored.3. Launch the products of tomorrow
Finally, preparing for this evolving market means placing particular focus on NPD, and a deeper transformation of existing products to match changing consumer tastes. And by this, we don’t mean Toblerone misguidedly hacking away at their iconic pyramid shape – but rather Nestlé’s groundbreaking work on restructuring sugar molecules to taste sweeter for the same amount. This could enable them to reduce sugar by 40% without affecting sweetness in confectioneries such as Kit Kats and Smarties by 2018. It’s a great example of R&D investment paying off, and the type of innovation that will keep a company like Nestlé strides ahead. The key, however, is to ensure that every new sugar-free, better-for-you product that hits the market has an exciting, emotionally engaging brand to go with it. Take for example Bounce’s redesign back in 2013 – injecting a previously bland, cold design with colour, fun, and a feel of its own helped them win over consumers beyond health nuts and gym bunnies. Because let’s face it, life can be tough enough already sometimes without having to cut down on the sweet things. So let’s keep it fun, and help consumers feel great about making positive choices for themselves.
Brands need to approach the challenging times ahead with positivity and creativity, and focus on communicating their efforts to consumers.
5. The bottom line
The world is getting fatter and unhealthier, and governments are faced with the increasingly urgent need to take drastic measures against the epidemic. As food and drink brands in the UK gear up to face an impending sugar tax, akin to those seen in more and more countries around the world, perceiving this only as a short-term hurdle would be imprudent. All the evidence points to it as only the beginning of what promises to be a long war against sugar. This is a threat to many brands, which potentially stand to face challenges not unlike those burdening the tobacco industry today. However, if businesses that have so far thrived on selling high-sugar products wish to see growth through these tougher times, they must approach the challenges with a positive and proactive attitude, better communicate how they are adapting their products to evolving demand, and prepare for the market of tomorrow.