Excise taxes on sugary drinks are spreading across all continents.
In a bid to cut high sugar diets and related diseases, country governments force beverage producers to reduce the sugar added to their drinks through the means of taxation of the consumer. Only a few years after early attempts and withdrawal of such tax initiatives, they are found in all world regions today and many more countries are preparing similar legislations. Not in every country the introduction was as vocal as in the United Kingdom and Ireland but the lawmakers’ target remains the same globally: Get a grip on soaring sugar consumption through beverages. With taxes in place for some years in the meantime, questions are raised about their impact. But it is obviously too early to find any effect on obesity or diabetes statistics. Any development on these indicators will take more time to
reflect changes in consumer behaviour. But an initial effect can be observed in the market. In the UK a major reformulation wave pushed the sugar content of many products right below the lowest tax threshold around the introduction date of the tax. The analysis of the product launches reveals that it is not the big multinationals that lead by example. It appears that the smaller and more local players understood the sugar reduction mandate not only as a service to consumer health and a tax matter, but also as a matter of differentiation. They stepped ahead and successfully pushed the sugar content down significantly.
From a composition point of view, the reformulated products do not show surprises. Predictably, sugar has been partially replaced by traditional artificial sweeteners. The question is how the consumer will accept these beverages, namely, how the traditional artificial intense sweeteners satisfy the taste expectation of a consumer used to drink the full sugar beverage. Without a convincing taste, the risk for sugar free drinks to fail in the market is high. In addition there is growing awareness that traditional artificial sweeteners are supposedly a risk to health as well. This constitutes a further challenge for the beverage industry, as consumers are now not only becoming wary of and avoiding sugar, but also the common sugar alternatives, namely artificial sweeteners. Stevia based sweeteners do not have this additional burden of consumer’s reservation to carry. But their taste profile also need refinement to ensure further and more widespread use in the reduced sugar and sugar free beverage segment. Jungbunzlauer offers a tool that greatly supports this refinement.
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