Sugar: now a big fat problem for the soft drinks industry?

Just days into the new year the UK soft drinks industry came in for a nasty surprise - in an innocent-looking ad from the makers of Wallace & Gromit.

The Change4Life campaign warned Corrie viewers of the “shocking” 17 cubes of sugar “hidden” in a cola bottle.

It wasn’t so much the content as its timing that caught executives out. For two weeks later health minister Anna Soubry, who sanctioned the ad, was due to announce a pledge by leading drinks brands that will see well over 2,000 tonnes of sugar voluntarily removed from their products. “The timing, just days before a whole bunch of companies signed up to that next stage of the Responsibility Deal, couldn’t have been worse,” says one global drinks brand executive.

Last week the screw turned tighter as 60 health organisations called on the government to slap a 7p per can tax on sugary drinks in the Budget. Soubry has warned ministers will resort to regulation unless more is done, while Labour has promised new laws to cap “horrific” levels of sugar in what the executive calls an “increasingly demonised” sector.

So do the devil’s horns fit? “More than 60% of soft drinks now contain no added sugar,” claims British Soft Drinks Association director general Gavin Partington. “As for taxation, 10p out of every 60p can of drink already goes to the government thanks to VAT.”

Indeed, consumption of soft drinks containing added sugar fell almost 10% in the last decade- while obesity soared by 15 % - suggesting the problems lie elsewhere, at least in part.

But within the DH, carbonated soft drinks are rapidly becoming public enemy number one. Documents reveal the calories reduction pledges in the Responsibility Deal will be reviewed again this spring, with tougher targets in the pipeline for soft drinks.

The pledges announced by Soubry last month saw GSK, AG Barr and Britvic join Coca-Cola and PepsiCo in committing to the Deal, representing 60% of the sector by sales. But with Coke, Pepsi and Tesco alone accounting for 596 trillion calories in 2011 the industry is looking increasingly vulnerable, and is already thinking again about its reformulation and marketing strategies.

The BRC and FDF are working with food science experts at Leatherhead Food Research on research into alternatives to sugar, after a report on salt last year was widely credited with staving off a further sweeping round of DH targets for salt reduction in 2013.

The report rammed home the barriers in technology and consumer taste of moving too fast on salt reduction but also, crucially, highlighted the millions being spent by companies on new technologies to aid reformulation.

“I’m not sure we will see the same sort of pressure as we have had from the government on salt, but the pressure is growing,” says Dr Wayne Morley, head of innovation at Leatherhead, and former technical food director at Unilever, who is leading the project. The research will involve retailers and suppliers combining resources on alternatives to sugar, including stevia and other artificial sweeteners - such as aspartame, recently cleared of health fears by EFSA.

Layering techniques

“We think the same sort of layering techniques we have been using with salt could work for sugar too,” says Morley.

Tricking taste buds with initial high hits of sugar without the same follow-through of calories is one idea.

Coke cut sugar levels in its Glaceau Vitaminwater by 30% in December using stevia, while weeks later PepsiCo announced its stevia-based Tropicana fruit juice would carry half the calories of conventional juices.

But carbonated drinks have seen less experimentation in the UK than other countries.

Last year in the US PepsiCo launched Pepsi Next, a mid-calorie cola sweetened with high-fructose corn syrup, aspartame, acesulfame potassium and sucralose. It has also been released in Australia sweetened with stevia. And last month in Japan it went further, releasing a Pepsi special containing the fibre dextrin, which it claimed actively reduced fat levels.

“The biggest barrier will always be taste,” says Morley, who says retailers are key. “If one of the major retailers says, ‘Right, we’re going to cut the amount of sugar in our drinks by 30%,’ you would see others follow suit,” he says.

Sainsbury’s has slashed sugar content in its own-label soft drinks (see panel, left) while PepsiCo has not advertised its full-fat line since 2005. Now Coca-Cola is understood to be exploring a new approach based on a new marketing programme launched in the US last month, featuring its first ever ads with an overtly anti-obesity message.

“All calories count. No matter where they come from, including Coca-Cola and everything else with calories,” the ad states, while stressing the importance of exercise and the opportunities of switching to alternative diet products.

The Grocer understands Coke is looking at how it could bring the US ads to the UK, albeit with a less saccharine message for a more cynical audience.

Cynical

In a survey for The Grocer by Him!, 44% of consumers admitted to exercising less than once a week last month - and more than half of those did no exercise at all. But ministers assessing the public appetite for taxation might want to look at a survey of nearly 1,250 consumers by Leatherhead, which shows artificial sweeteners, along with e-numbers, artificial colours, sat fats, salt and GM, are all regarded as less desirable ingredients than sugar.

Since Diet Coke man - who returned to celebrate the brand’s 30th anniversary last week - last strutted his stuff in 2007, Coke alone has slashed the calorie content of Fanta by 30%, Oasis by 35% and Lilt by 56%. But even the global giants are not breathing easy. “Is the Treasury going to rush into a new round of taxation after pastygate? I rather doubt it,” suggests the drinks company executive. “Is all of this huge noise going to see a big kneejerk reaction from the soft drinks industry? The answer is no. But everyone is very twitchy.”