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Is the sugar in your soft drinks coming between you and market growth?

Kamel Errais, sub-regional leader for IFF in Africa, explains the sugar challenges facing the soft drink industry – and how to beat them with the latest ingredient technology.

IFF - sugar reduction
Kamel Errais

If you’re a soft drink producer, you could be feeling the pinch of several looming challenges right now.

One of them is the rising price of sugar. The other is that more African countries could follow South Africa and introduce a sugar tax within the foreseeable future.

From a business perspective, both are compelling reasons for reducing the added sugar in carbonated, juice-based and energy drinks. And that’s before you’ve even begun to think about what consumers are demanding.

Since South Africa introduced its Health Promotion Levy in 2018, soft drink companies have been forced to reformulate their products to avoid the tax on added sugar. They are not alone.

Today, more than 50 countries have introduced a similar tax, and more than two-thirds of global beverage companies report that they have reduced the sugar in their products[1].

A spreading trend

In Africa alone, close to 1,000 beverages launched from 2017 to 2022 have a low or no sugar added claim[2] – a trend clearly spreading from the south of the continent to countries in the west and east.

From a commodity perspective, the Trading Economics platform shows that, since early 2020, global sugar prices have followed a continuing upward trend[3].

In other words, the cost of sugar-containing drinks is only going to get higher.

That’s the financial argument for cutting sugar addition in beverages. The other primary driver, of course, is the people who buy them. Growing consumer awareness of the impact of nutrition on health is making sugar reduction unavoidable for future category growth.

Top purchase drivers

When the South African authorities introduced the Health Promotion Levy to address the high rates of obesity fuelling type 2 diabetes, they aimed to address growing consumer concerns about health and wellness.

The COVID-19 pandemic has sharpened this awareness and, along with it, strengthened consumer demand for beverages made with familiar, label-friendly ingredients.

As many as 60% of South Africans are interested in soft drinks that offer additional nutritional benefits[4].

Today, health concerns rank among the top three drivers of soft drink purchases. The number one driver is taste, with price coming in second. Orange, ginger, lemon, banana and honey are the ingredients that consumers associate most with health and wellness.

Altogether, drinks producers face a complex cocktail of needs. But what do they mean in practice?

South Africa’s sugar tax has already demanded a reformulation response from the beverage industry. As a result, the average Brix of carbonated soft drinks and cordials is now four – representing four grams of sucrose per 100 grams of solution and the level where the sugar tax kicks in.

By comparison, the average Brix of a still drink or nectar is around 10.7 in East Africa and 12 in West Africa. If any country introduced a similar sugar tax in these regions, drinks producers would have to cut sugar addition by around two-thirds to avoid it.

Beating the sensory hurdles

Simply put, reducing the added sugar in beverages invokes two primary hurdles. The first and most obvious is the loss of sweetness. The second is the loss of mouthfeel – the satisfying full-bodied sensation that comes with sugar bulk. It’s particularly the mouthfeel challenge that many drink companies still struggle with after cutting the sugar in their brands.

And then there’s the problem of the unpleasant aftertaste that often follows fortification with active ingredients such as caffeine and B vitamins.

Fortunately, ingredient technology does exist to help manufacturers beat the sensory issues of sugar reduction and fortification without having to pass on additional costs to the consumer.

At IFF, for example, we have documented good results with flavour modulators that interact with taste receptors on the tongue and in the oral cavity.

In this way, they can improve the consumer’s experience of these ‘lite’ products, for example by decreasing bitterness, masking off-notes and restoring mouthfeel.

Using flavour technology, it’s also possible to make juice-based drinks feel extra juicy and mouth-watering or increase the fizzy perception of carbonated drinks.

Rebuild with a friendly label

Together with flavourings, sweeteners derived from wood, plants and milk have superior attributes that rebuild the sweetness of low or no added sugar drinks.

Xylitol, xylose, fructose and lactitol are among the well-known options, each with a negligible impact on blood sugar – a critical aspect of type 2 diabetes management.

Last but not least, drink manufacturers can draw on hydrocolloids that both enhance the texture and mouthfeel of their products and keep them stable right through shelf life.

The beauty of these ingredients is that they deliver the best possible sensory experience with much less sugar and a consumer-friendly label. They also reduce costs overall – keeping sugar-reduced beverages affordable as well as appealing.

That all adds up to many good reasons why soft drinks companies should remember their ingredient supplier next time there’s a challenge on the horizon.

So don’t hesitate to get in touch, because we’ve got you covered!

For more info, click here: https://www4.iff.com/Nourish-signup

To contact IFF South Africa, email: Fazila Maharaj, fazila.mahomed@iff.com; T: +27 (0)11 922 8800

[1] Mintel Insights: Private Label – Responding to Health & Wellness Trends 2022

[2] Mintel GNPD

[3] https://tradingeconomics.com/commodity/sugar

[4] IFF PX, (2022), Carbonated Soft Drinks ZA, online survey

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