Whether the Soft Drinks Industry Levy (SDIL) – now in place for over five years – has been a success or not depends on who you ask. While health bodies claim a victory, and brands say the law kickstarted necessary innovation, others say it hasn’t modified consumer behaviour at all. So, who is right?
The sugar tax has always been divisive. Introduced in the UK in 2018, the measure saw a levy of 24p per litre of drinks containing 8g of sugar per 100ml, and 18p per litre for 5-8g per 100ml imposed, in a bid to reduce obesity, particularly in children. Can you really modify consumer behaviour by making something cost more?
Before it had even been introduced, it had an impact. Chiefly, it incentivised brands rather than consumers to make changes. From its 2016 announcement to 2018 implementation, 50% of manufacturers had reduced their sugar content.
Did it work?
The good news is, according to the World Cancer Research Fund, 45,000 tonnes of sugar have been removed from soft drinks in the UK since 2018. A limited study in the PLOS Medical journal found a direct link between the tax and preventing over 5,000 cases of obesity in year six schoolgirls in England.
And according to the Obesity Health Alliance, the total sugar sold in soft drinks has fallen by 35.4%, reducing the average sugar content of drinks from 5.7g to 2.2g. That equates to 48 milling kgs of sugar per year. Which sounds great.
However, now the bad news
If the goal was to modify consumer behaviour, it failed. Currently, 1 in 5 teenagers in Europe drink sugary soft drinks daily. In 2022, approximately 15 billion litres of soft drinks were consumed in the UK, up from 13.5 billion in 2017. And according to NHS and government data, from 2021-2022, 25.9% of adults in England were estimated to be obese. That’s not much of a change from 2016, when the figure stood at 26%. The National Child Measurement Programme finds that obesity increased from 17.5% to 21% between 2006-7 to 2019-20.
Since it was introduced, there’s been little to remind consumers of the SDIL – save for reduced sugar labels appearing across reformulated products – nor to educate on healthy consumption. And to quote the inimitable, our lord and saviour, Taylor Swift, “band-aids don't fix bullet holes”. Amen. Without making sugar reduction in the food industry mandatory too, overall consumption was never going to be hugely impacted. A government target to reduce sugar intake by 20% by 2020, was doomed to fail.
But in many ways, the tax had lucky timing. Introduced just prior to a period of widespread healthy living awareness – aka, the pandemic – consumers have never been more receptive to better-for-you options. But its here the soft drinks industry is failing, by being largely unimaginative.
The SDIL by necessity, forced innovation. According to Britvic Retail commercial director, Ben Parker, “96% of our innovation now is in no added sugar”. They’re not alone. Though we don’t have data to back it up, the launches we’ve seen suggest the split must be similar across all large producers. But, product development so focused on one thing, is dull, and not likely to move the market forward.
Per capita carbonated soft drinks consumption fell from 75 litres in 2019, to 73.8 litres in 2021. Now more highly aware of caffeine consumption, and additives such as colourings, a shift to more ‘natural’ liquids by consumers, and much more rampant innovation in low and no sugar options by producers, has made this a much more exciting space. True. Scares over artificial sweeteners in recent months look set to have an impact on diet options too.
The good, the bad, and the boring
But following the SDIL, producers appear stuck in an innovation rut. For too long the market has been focused on removing what is actively bad, rather than adding what is actively good. And as such, soft drinks innovation in the UK has largely stalled.
Where are the functional products offering health benefits, from immune support to lowering blood pressure? Where are the ‘clean label’ products? Where are the health-aging products promising nutritional support for specific age groups, such as high calcium for younger consumers or loss of bone density in older consumers? Functional brands have tentatively launched in recent years, but none have made it to the mainstream. And no mainstream brands have taken up functional benefits as an added extra to their liquids.
We’ll one day look at the proliferation of sugar in soft drinks in the way we look at the one-time lack of seat belts and air bags in cars; things only got better because regulation forced producers to act. A commitment to making soft drinks – especially carbonated sodas – healthier is one that rightly should be long term. But five years into the sugar tax, it’s time for brands to look beyond it for truly healthy innovation.
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