Sugar taxes inspiring beverage companies to innovate with alternative sweeteners

57% of UK consumers say chocolate tax would stem consumption compared to 74% globally, says GlobalData

As sugar’s impact on health becomes ever more apparent and the case for its taxation continues to be made, manufacturers of drinks high in sugar must position themselves ahead of the curve in exploiting demand for beverages with lower sugar content, according to GlobalData, a recognized leader in providing business information and analytics.

63% of consumers globally try to either limit sugar or avoid it entirely, and 74% say they always or often check nutritional labelling on food products for information on sugar content.

Emma Wright, Consumer Analyst for GlobalData, explains: “Sugar is often indicted in the press as the most significant dietary cause of obesity and other health issues. In this way, consumers tend to perceive the ingredient in an overwhelmingly negative way, and increasing media attention on sugar taxes and awareness campaigns will only serve to encourage this.

“With 43% of consumers globally paying attention the type of sugar or sweeteners used in food and drinks, producers will be encouraged to experiment with different types of sweeteners in order to meet an increasing demand for healthier options.”

In Japan, for example, rare sugar appears to be the new way forward for health-conscious consumers. Low-sugar versions of standard products are currently losing ground in the country as an increasing number of Japanese consumers are turning away from sugar due to health concerns. Rare sugars, which are sourced naturally, offer solutions in that they contain up to 70% of the sweetness of sugar with almost none of the calories. During 2014-2016, GlobalData tracked 14 truly innovative products containing rare sugar that were launched in the Japanese market.

Wright continues: “As well as strong consumer desire to lower sugar intake, price-sensitive consumers will turn to alternatively sweetened options to save money. However, they may also shift their demand to substitute products with high sugar content. Deciding to re-allocate their spending on untaxed categories that still contain high amounts of sugar could impact soft drinks sales, but it will not lower sugar intake.

“Manufacturers can capitalize on this trend by launching new products within untaxed categories, such as ready-to-drink coffee and tea, flavored water, and milkshakes, appealing to indulgent consumers who are willing to experiment with new flavors and formulations.”

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