Depending on how the reformulation is handled, firms could benefit from R&D tax credits from Her Majesty’s Revenue and Customs (HMRC), according to Dr Kevin Bailey, a member of tax credit advisory firm Jumpstart.
A tax on sugary drinks will be introduced in 2018. The tax will be levied in two bands, adding between 6p and 8p to the price of a can of soft drink containing more than 5g of sugar per 100 millilitres.
In August, the government’s childhood obesity plan set industry a target to reduce the sugar content of food and drink popular with children by 20% in four years.
Eligible for R&D tax relief
Bailey suggested the challenge of trying to find a replacement ingredient to sugar, while ensuring that the final product specification remained unchanged, was the “catalyst for a flurry of development activity” that would be eligible for R&D tax relief.
With a PhD in chemistry, however, he was under no illusions about the difficulties of carrying out reformulation.
“Recipe reformulation is an immensely challenging task when there are specific target criteria that should be attained,” said Bailey.
“Any reformulation work resulting in a product that is fundamentally different in respect of appearance, taste and texture will alter consumer experience and potentially impact detrimentally on brand loyalty and consumer demand.
‘Impact detrimentally on brand loyalty’
“It is clear that sugar is an ingredient with a complex role within products. It provides sweetness, volume, mouthfeel and viscosity to food products, and also has preservative properties impacting on product shelf-life.”
Replacement of free sugars with sweeteners might provide the target sweetness, but they provided no energy, texture and volume, and were often much sweeter than natural sugars, Bailey suggested.
“Volume and texture can be provided through replacement with bulking agents, such as sugar alcohols, inulin and polydextrose, which can also act as humectants in confectionery, biscuits and pastry. However, these bulking agents are less sweet than free sugars with less energy content,” he explained.
Meanwhile, last week, a study by health journal The Lancet Public Health claimed the UK soft drinks levy could prevent thousands of people becoming overweight, but alone was not enough to solve Britain’s obesity crisis.