War on sugar threatens soft drinks market
In 2014, the UK soft drinks market was estimated to have grown in value by 0.2%, according to a new market report by Key Note.
Despite scrutiny from the media it has showed an encouraging performance. While market value is thought to have held up in 2014, volume consumption is thought to have declined, as the war on sugar shifted focus to fructose, or fruit sugar, and its potential health impacts.
This current war on sugar coupled with the industry’s response and potential government action to reduce sugar consumption are key issues for soft drink producers and retailers at present.
With numerous years of widespread media attention of the negative health impacts of sugar, its contribution in rising prevalence levels of obesity and diabetes, and soft drinks’ role in excessive levels of consumption, demand for full sugar original variants of soft drink products across virtually all sectors has been tumbling.
Whilst the development of low calorie and sugar free variants of soft drinks brands is, the ongoing negative coverage remains, leading to a decline in volume sales in virtually all product categories.
Furthermore, the call for additional taxation on sugar sweetened beverages has been gaining increasing traction as various governments around the world enact similar policies.
This sugar issue is likely to impact the soft drinks market for the foreseeable future, with heavily constrained value growth predicted over the next five years, although low calorie and sugar free formulations and bottled water should represent higher growth segments.
However, whether the government should bow to pressure from the public health sector and introduce additional taxation is a question yet to be answered.
