Soft drinks levy does industry a favour

By Rod Addy contact

- Last updated on GMT

The Soft Drinks Industry Levy helped to boost the performance of its Robinsons squash brand, Britvic said
The Soft Drinks Industry Levy helped to boost the performance of its Robinsons squash brand, Britvic said
The Soft Drinks Industry Levy (SDIL) helped to boost sales for the industry, rather than dampening performance, according to Britvic’s 2018 Soft Drinks Review, which was made public on 11 April.

Soft drinks sales shrugged off the worst that the CO2​ shortage and uncertainty created by Brexit could throw at the category, achieving 7.7% value growth to £6.2bn last year, the report stated.

Based on Nielsen Scantrack data, the market-leading increase was five times that observed in the total grocery category [52 w/e 29 December 2018].

“The sales have obviously been boosted by the Levy,”​ said Phil Sanders, GB commercial director for the at-home sector at Britvic. “Even if we excluded those numbers, our internal calculations show that soft drinks would still have seen +6.8% value growth, which would maintain its number one value growth position.”

Reformulation

That said, at the time the Levy was introduced in April last year, only 8.4% of the total soft drinks market became Levy-liable [Nielsen Scantrack, 12 w/e 30 June 2018]. That had demonstrated the concerted effort by manufacturers to create sustainable solutions through a variety of reformulation and product packaging strategies, Britvic asserted. 

“The levy has certainly had an immediate and lasting impact on the soft drinks category,”​ said Sanders. “The cola category has seen a significant volume shift from regular to low- and no-sugar options and products such as Pepsi Max have now gained significant share from full sugar products.

“Britvic has been committed to reformulating its products and we have removed 20bn calories annualised since 2013.”

Robinsons

The post-levy trend towards low-/no-sugar products had also benefited the dilutes category, primarily driving the exceptional performance of Britvic’s Robinsons brand and the launch of its premium Fruit Cordials and Creations, Sanders said.

“Today 99% of our GB-owned brands are below or levy exempt and we have a strong desire to make a positive impact on people’s lives. This extends beyond our products to also include our commitment to our communities and the environment.

“We recently rubber-stamped our ambitions in terms of sustainability by appointing Trystan Farnworth to the GB board level position of director of sustainability. Over the coming months and years, Britvic will be working systematically to improve processes and to support the industry to become more sustainable.”

Britvic produces and sells its own brands, such as Purdey’s, Drench, Tango and J2​O, plus PepsiCo brands including Pepsi, 7UP and Lipton Ice Tea under licence in GB and Ireland through exclusive agreements.

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1 comment

Big winners from the Soft Drinks Levy

Posted by G Taller,

Not too surprising the soft drinks industry has embraced low cal Sweetners. It has saved itself a fortune because sugar was largest single cost ingredient. The health “benefit” has allowed them to overcome the negative consumer feedback in previous attempts as it is now the “healthy” option! They have managed to reduce input costs and maintain price, increase margin and claim to be benefiting consumers - a win, win, win!

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