One of the biggest challenges in the last year to hit the vending industry is the sugar levy, proposed in April 2016 but set to be implemented in 2018. An average 32% of value sales in the food/drink industry is low/non sugar drinks, showing a large proportion of products are set to be hit by the charge, so how have businesses reacted?
Britvic have seen to be ahead of the change, removing 19billion calories since 2012, meaning 67% of their value sales come from low/non sugar drinks*, a much higher percentage than industry average. They also have further commitment to reducing another 20% of calories in their products by 2020.*
Coca-Cola’s portfolio is set to be the biggest hit by the tax with a rumoured 52% of their range to be hit**. This large tax is said to be mainly from their regular Coca-Cola drink which contains 35g of sugar in a 330ml bottle. The giant brand has said it has no plans to change the recipe for their favourite beverage, but instead will be investing more than £10m a year in reformulating and promoting Coca-Cola Zero Sugar**. They plan to have over half of Coca-Cola sold in the UK to be from their little or no sugar products by April 2018, which will make the UK the first country to achieve this globally.
Their rivals PepsiCo have also pledged to slash their beverages calorie count by 2020. According to PepsiCo, at least two thirds of the company’s beverages will contain 100 calories or less per 12 ounce servingᶧ. Furthermore, they also rebranded Pepsi Max as Pepsi Zero Sugar, rivalling Coca-Cola Zero Sugar, in a boost to hit the lower sugar targets.
Confectionary giant Nestle on the other hand, recently announced that they have found a new sugar that will reportedly cut sugar in their chocolate by 40% in 2018 without effecting the taste¹. The scientific breakthrough uses natural sugars and is said to dissolve more quickly so that it tricks the taste buds into believing the chocolate is sweeter and has more sugar than it actually does. However the formulation behind this top-secret sugar is not yet known, Nestle is currently patenting the findings so a release of the actual solution shouldn’t be too far away.
Here at LTT Vending, we are no different to the big brands, and have been fine-tuning our product range to ensure that we can be flexible in our offering, providing lower sugar products as part of our range. These products will be available along with our existing products to ensure that we can cater to the wide needs that our different customers have. With the added pressures that healthcare and educational establishment have in reducing the amount of sugar in their food and drink services, we know it’s important to include lower sugar items as part of our product portfolio.
It’s clear that all the brands are reacting to the sugar tax and trying to cut down on their added sugar. With two thirds of Britons overweight or obese* the advantages of the levy have surely got to outweigh the commercial challenges these brands face?
*Britvic January Newsletter, 2017
** Financial Times, 2016
ᶧ Reuters UK, 2016
¹ BBC.co.uk, 2016