52SWEETENERS

Soft Drinks International – March/April 2021

Drivingreformulation
efforts through sugar reductionO
Beverage
manufacturers
have responded
to the growing
demand for
reduced sugar
beverages bypushing forreformulation,
writes NathanielLim.

ver-consumption of sugar remains a leading global cause of obesity, diabetes andtooth decay. According to Euromonitor International, South Africa, Argentina and Mexico are
the leading markets with at least 50% of total
sugar consumed per capita coming from softdrinks. Nevertheless, there has been growing
awareness to reduce sugar consumption inrecent years.
In 2020, total volume consumption of betterfor you reduced sugar soft drinks reached 31.6
billion units; an increase of 3% on 2019, finds
Euromonitor. This highlights that consumers
are prioritising their health, accelerated by theCOVID-19 pandemic and growing health consciousness.

Beverage manufacturers respond
Across all regions, consumption in Western
Europe recorded the strongest growth of 8% in2020. This was driven mainly by markets suchas the UK, which recorded a significant
increase of 12% due to the impact of the sugar
tax since 2018, as well as increasing consumer
knowledge about the ill-effects of high sugar
consumption.
According to Euromonitor International’s
Health and Nutrition global survey, almost
52% of global consumers hold the view thatlower sugar intake would make them feel
healthier and 42% mentioned that they would

attempt to limit their intake of refined sugars,
with stronger intent generally reported among
women and older respondents.
In response to the growing demand for
reduced sugar beverages, and growing government legislation efforts, such as sugar taxes,
beverage manufacturers have responded bypushing for reformulation efforts, the mostcommon being reducing sugar content while
introducing low and zero calorie sweeteneralternatives, as well as exploring portion control via pack sizes. Not only does this reduce
the tax burden, it also seeks to strengthen thehealth positioning of products, appealing tohealth-conscious consumers.
Global companies Coca-Cola and PepsiCo
have increased their offerings of zero sugarbrands, such as Coca-Cola Zero and Pepsi Max,
substituting sugar with alternative sweeteners
like aspartame and Ace-K, to retain the taste.
Meanwhile, Nestlé launched its Pure Life carbonates brand in China which has zero sugar
and uses erythritol as a sweetener.
Local companies have also driven such
efforts to reduce sugar content. For instance, inAsia Pacific, Fraser & Neave in Malaysia reformulated 90% of its RTD products to have lower
sugar content, of below 5g/100ml. Likewise,companies like Oishi in Thailand and Shenzhen Meixixi in China launched sugar-free
RTD tea products. In the US, NewTree Fruit
Company uses its patented Sugar Reduction
Technology to remove naturally occurringsugars from juices to create 100% fruit juicewith a very low sugar content.

Challenges faced

Source: Euromonitor International, Nutrition 2020.

While consumer awareness of reduced sugar
beverages is increasing, taste and texture ofthese products remains critical to the purchasedecision.
As such, reformulating beverages with highsugar content remains a challenging task for
manufacturers. Although brands such as CocaCola Zero and Pepsi Max were successful refor-

Soft Drinks International – March/April 2021

DRIVING REFORMULATION

53

Source: Nestlé Pure Life, China.
mulations that appeal to consumer tastes - eachrecording 50-60% volume growth in Europe
over 2014-2019 according to Euromonitor - theprocess of product reformulation remains complicated.
It goes beyond just removing sugar and substituting with alternative ingredients andsweeteners. Lengthy trials are conducted toensure that these sugar substitutes, such as
Ace-K, aspartame and erythritol, can maintainthe original product’s taste. Companies that arewilling and able to invest in research anddevelopment, whilst ensuring that it is affordable, are at an advantage in launching these
reduced sugar beverages.
Besides ensuring that a product’s taste
appeals to consumers, other factors need to beconsidered in the process of product reformulation. A product’s functionality, affordability
as well as its ability to meet government legislation and approval need to be considered
before launch. This can be supported throughgovernment incentives and funding for manufacturers in their product reformulation efforts.

Source: Euromonitor International, Health and Wellness 2020.

Source: Euromonitor International, Health & Nutrition Survey 2020.

Consumer education
Long term, consumer education remains key tostrengthening the appeal of reduced sugar beverages. This includes new marketing initiatives, packaging labelling changes, and pricepromotions, to broaden the appeal of these
healthier products. This transparency helps
consumers be more open to trying these healthier options, as well as appealing to their taste
preferences. This is especially key in developing markets, where beverages with high sugar
content remain attractive and affordable, and it
requires a mindset shift for consumers tochoose reduced sugar options. This requires
multiple stakeholders – manufacturers, government and retailers – to promote the consumpntion of low-sugar products.

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Sources: The Potential Toxicity of Artificial Sweeteners, AAOHN Journal; Sweetener
Comparison Chart, NowFoods.com.

Nathanael Lim is a Senior Analyst at Euromonitor
International with a focus on Non-Alcoholic Drinks.
Based in Singapore, Nathanael has more than 4 yearsof experience in the industry.
Nathanael leads a team of local analysts inSoutheast Asia researching on the industries of Drinks& Tobacco, exploring market opportunities and next
steps in articles and presentations, providing thoughleadership.
Nathanael advises clients across Non-Alcoholic
Drinks and Alcoholic Drinks industry on the impact ofgovernment legislation, product innovations andsustainability.
He holds a Bachelor’s degree in Economics from theSingapore Management University.

Nathaniel Lim is senior
analyst with a focus on
non-alcoholic drinks andEuromonitor
International
www.euromonitor.com