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Sugar Tax

Today in the UK, we are suffering a major public health crisis as obesity levels continue to rise. In order to address this, the Government has announced the implementation of a sugar levy on soft drinks, more commonly known as the ‘sugar tax’. Russell Goldman, Commercial Director, Licensed, Foodservice & Leisure, at Britvic advises on how operators can become levy ready and benefit from the change.

On 6 April, a new levy will apply to drinks that contain added sugar and have a total sugar content of above 5g per 100ml as consumed. There will be a higher levy applied to drinks that contain added sugar and have a total sugar content of above 8g per 100ml. Excluded from the levy will be pure fruit juices and milk-based drinks that have a milk content of at least 75%.

Britvic rangeBritvic has removed over 20bn calories from its GB portfolio since 2013 on an annualised basis. By April, 94% of its owned brands (72% of Britvic’s full GB portfolio) will be below or exempt from the levy.

Britvic recommends following these four steps to ensure you are fully levy ready:

  • Be Range Ready – ensure you have a great-tasting range of drinks available that are either below the levy threshold or exempt.
  • Pass on the Levy – Our recommendation is to follow the spirit of the levy and create price differentials between high sugar and low sugar drinks (whether you do this and any onward pricing decisions are entirely at your discretion). 
  • Engaging Teams – Educate your teams to know the products and facts. This will enable staff both to make informed recommendations and nudge your guests in the right direction. 
  • Guest Experience – Provide your guests with an exceptional experience through inspirational choices that are perfectly served.

Grow through change

Health and wellness has been a huge trend in soft drinks for many years already; we believe it is only going to get bigger when the levy hits in April. We also believe that the levy can be turned from a threat into an opportunity by following these key drivers to grow your sales:

  • Motivate more adults to choose soft drinks on more occasions
    Adults are increasingly looking for a more sophisticated soft drink specifically for them. Make sure you’re catering for this growing trend by stocking adult soft drinks ranges 
  • Deliver great tasting drinks with permissible health credentials, giving your guests the confidence to enjoy soft drinks more often
    When dining out, 94% of guests will treat themselves, however 74% still search for healthier options so deliver great taste without the calories by offering ranges under the levy threshold or exempt, such as Pepsi MAX or J2O 
  • Feature soft drinks in more food occasions and enhance the whole occasion
    72% of guests would order soft drinks specials if highlighted on the menus; 80% like staff recommendations of drinks that complement their meal. Whether your outlet offers a full menu or simple bar snacks, offering ideas for the perfect food and soft drinks pairings will help to elevate the consumer experience and spend 
  • Maximise current trends to deliver sophisticated drinks, worth paying more for
    Premium soft drinks are in 28% value growth so maximise the mixed drink revolution by offering fantastic mixed drinks and sensational serves to upgrade customers to premium drinks and create memorable experiences.

Food & drink pairings

The eating out occasion continues to grow with forecasts for 2018 predicting the market will be worth £89.3bn , up from £87.9bn in 2017. With rising inflation putting pressure on disposable incomes, as well as the increasing number of delivery offerings, food-led operators will need to work even harder to protect their share of consumer footfall.

Evolving habits – including reduced alcohol consumption, particularly in those aged 25-34 and above 55 – and consumer trends geared towards a healthier and more balanced lifestyle, mean soft drinks now have an even greater role to play than before. The outlets that acknowledge and act on the burgeoning desire for soft drinks – by offering the right product, served in the right way and at the right time – will be the ones that succeed in this increasingly competitive marketplace.

What is the Soft Drinks Tax

Grab the opportunity

We believe the levy presents one of the biggest opportunities we’ve seen for soft drinks in a long time if you focus on maximising the opportunity, rather than minimising the impact. We recommend reviewing your range now and training your staff well so they are knowledgeable on the levy and can in turn offer the all-important support to your guests to make sure they are also prepared for what is to come.

Britvic is the largest supplier of branded still soft drinks in Great Britain (GB) and the number two supplier of branded carbonated soft drinks in GB. The company combines its own leading brand portfolio including Robinsons, J2O, Drench, Purdey’s, Fruit Shoot and R White’s with PepsiCo brands such as Pepsi Max, Tango, 7UP and Lipton Ice Tea, which Britvic produces and sells in Great Britain and Ireland under exclusive PepsiCo agreements.

Coconut waterUK sales of coconut water are booming while the industry as a whole is forecast to hit US$7billion in sales globally by 2021. “Coconut water taps in to the trend for natural, healthy products as it contains naturally occurring, highly hydrating electrolytes with no added sugar or preservatives and is a great solution for anyone looking for a healthier alternative to sugary fizzy drinks,” says Steve Barton, CEO, C7 Brands, which offers both carbonated and still coconut waters in several flavours.

Sugar Levy – Know the facts

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