A historic change in the sales of carbonated soft drinks has taken place since the Soft Drinks Industry Levy (SDIL) came into force a year ago -- with sugarfree drinks rising, and full sugar products falling.
For Coca-Cola, market leader in the UK, volume purchases of Coke Zero Sugar increased 50% over the past year. For Pepsi, sugar-free Max rose 17%.
In contrast, sales of full sugar Classic Coke and Blue Pepsi both fell. Understandably, if regrettably, the companies are not keen to disclose hard numbers on products moving downwards. But the balance of sugarfree-to-sugared rose to 60-40% for Coca-Cola, to 83-17% for Pepsi.
Every time a consumer changes from a 500ml bottle of Classic or Blue to an equivalent bottle of Zero or Max, there is a reduction of over 200kcal. Cutting sugar in soft drinks will not, by itself, cure the nation's health problems, but it has got a key government nutrition policy, the Childhood Obesity Plan, off to a rapid start.
The sales shifts are principally the result of price differentials that SDIL immediately opened up between full sugar drinks (more than 8g sugar per 100ml) and levy-free no/low sugar products (less than 5g/100ml).
In our shop surveys during April last year, immediately after the levy came into operation, we recorded discounts of 11-25% on small single bottles and cans in the front-of-store impulse sector, and 20-39% on large-bottle family purchases.
Thus, SDIL met the principle of the World Health Organization, "...taxation of sugar-sweetened beverages...needs to induce a consumer price preference for beverages with a lower content of free sugars, to ensure healthy diets".
It also impacted on the real world. For a year now, consumers have had economic incentives to purchase no/low sugar drinks, not just moral injunctions. The changed sales figures show that discounts have had the effect that economists expected and health specialists hoped for.
The movement towards no/low sugar drinks is likely to continue, indeed expand. We have just completed an enlarged range of shop surveys in supermarkets, pharmacies, takeaway food multiples and independents, to measure the effects of SDIL after one year.
Discounts continue at roughly the same level as before. And, following the reformulation of most products to lower their sugar content and thus avoid the levy, there are only two full sugar products of public health significance on the British market, Classic Coke and Blue Pepsi
What is different over the past year is that new sugarfree variants of popular drinks, produced in response to the levy, have gained distribution in major retailers. They are now much more accessible to consumers.
All the new versions of Coca-Cola's subsidiary brands are now appearing on shelves -- Fanta, Dr Pepper and Sprite, even Lilt and Oasis. AG Barr's iconic Irn Bru currently comes in two new sugarfree variants, as well as the reformulated, lower-sugar version of the original product.
Less expectedly, virtually all major brands of energy drinks have also introduced sugarfree variants.
No longer just sugarfree Red Bull, now also no sugar versions of Lucozade, Monster, Relentless, Rockstar, Emerge, Boost, and Carabao are gaining shelf space in an already crowded category -- with Big Brother, sugarfree Coca-Cola Energy, just entering the market. All eight supermarket groups we surveyed stock these new energy drinks, the majority carry four or five sugarfree brands.
For Lucozade, Ribena, Suntory, which reformulated 60 products in response to the levy, its new sugarfree energy drink, Lucozade Zero, has been the most successful launch in the company's history.
Innovation in natural sweeteners
Most of the no/low products now on shelf use the established sweeteners, aspartame and AceK. But the controversies over sugar are stimulating development of many new substitute ingredients, from "natural" sweeteners like stevia to lower-calorie versions of sugar itself. In time, they too will stimulate innovative no/low products.
One factor limiting the shift towards reformulated drinks is the erratic price marking of the different options on shelves. This means customers are not alerted to the discounts available. Not just in small independents, but also in supermarkets and takeaway multiples, price tickets on shelves are sometimes missing.
Nonetheless, the key finding this year is that the SDIL has rapidly produced a significant shift towards no/low drinks. And the increased accessibility of many new sugarfree products should have a further impact on the sales balance in future years.
The levy is working.