Britvic ‘well placed’ to navigate sugar tax with 72% of portfolio below threshold
The UK soft drinks industry levy will come into effect in April 2018, taxing added sugar beverages with 5g sugar per 100ml and over. Ireland is set to introduce a similar tax at the same time.
“We recognize the significance of this event for the industry and the high level of uncertainty it will create in the short term,” says Britvic. “However, we have prepared well and, with our great portfolio of brands and our strong marketing and innovation plans, we believe we are well-placed to navigate it.”
Reformulation, innovation & responsible marketing
Britvic is the top supplier of still soft drinks and number two supplier of carbonates in Great Britain and Ireland. Its brands includes Robinsons, J2O, Fruit Shoot and Ballygowan.
In May last year, shortly after the announcement of the upcoming sugar tax, 66% of Britvic’s portfolio fell below the levy threshold.
By next April, 72% of its total portfolio and 94% of its owned brands will be below or out of scope of the Soft Drinks Industry Levy in Great Britain. In Ireland, 69% of its total portfolio and 79% of its owned brands will escape the levy.
Britvic says it is helping consumers make healthier choices in three ways: reformulation, innovation and responsible marketing.
“Helping consumers make healthier choices has been a key plank of our sustainable business strategy since 2013.
“We have continued to make progress in this area through our three-pronged approach: reformulation with no compromise on taste or quality, through which we have removed over 20 billion calories from GB diets on an annualized basis; innovation, where our pipeline is heavily weighted towards low/no-sugar drinks which comprised 68% of all projects across the Group; and marketing responsibly through our Responsible Marketing Code, where we do not advertise high sugar products to under 16s and have led all advertising in relation to Pepsi with sugar-free MAX since 2005.”
Innovations offer ‘significant future growth opportunities’
Britvic points to recent low calorie innovations which it believes promises good opportunities for growth in the future.
Purdey’s, a natural energy drink that uses fruit juice, spring water, botanical extracts and vitamins, increased its retail value by 55% this year.
In the second half of this year Britvic launched Robinsons ‘Refresh’d’, a blend of spring water and fruit juice, achieving £4m ($5.4m) retail sales value in 19 weeks since its launch. This RTD format uses naturally sourced ingredients and no added sugar, offering ‘tasty, healthy hydration’ at 55 calories per bottle.
