Focus on health to thrive in sugar tax market, says Britvic

Independent retailers have to tap into the trend for healthier soft drinks if they want to succeed in a sugar tax environment.

That was the message from Britvic as the company launched its 2017 Soft Drinks Review today.

The report found that low and no sugar soft drinks account for a respective 11% and 18% of the convenience channel’s sales. However, convenience under trades in low calorie soft drinks versus the multiples, and with the soft drinks industry levy coming into force from April 2018, convenience stores need to introduce more of these products into their ranges.

“The sugar levy will have an impact – it has the potential to cause one of the biggest disruptions to the category we’ve ever seen,” said Paul Graham, Britvic managing director. “We can already see trends for water and healthier drinks – and the price differential the tax potentially puts into the category will only accelerate that further.

“The retailers that will win and succeed in that market will already be adapting their range.”

Ahead of the introduction of the soft drinks tax, Trystan Farnworth, commercial director for convenience & impulse at Britvic, confirmed that Britvic would pass the cost on to its customers. “We are not obliged by the Government to pass the tax on, but as a business it would be utterly commercially unviable for us to absorb that tax,” he said.

“It will be up to our customers to decide whether to continue to pass it on to shoppers.”

Coinciding with the Soft Drinks Review was the launch of two products that capitalise on key growth areas.

Robinsons Refresh’d is a flavoured water with no added sugar, while Pepsi Max Ginger will continue to drive the 16.2% growth Pepsi Max benefited from last year. Both are available to stock now.

Around 70% of Britvic’s soft drink volume sales are low or no added sugar, and Farnworth said Britvic would reformulate more of its drinks before April next year.

He also predicted that manufacturers will reduce the size of packs for full sugar products ahead of the levy’s introduction.