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CONSUMER HEALTH

Can soft drink brands reduce sugar content and still maintain sales?

By our News Team | 2023

It is not sufficient for consumers to want to decrease sugar intake. Brands should offer appealing products that help reduce consumption.

Researchers from University of North Carolina in the US and University of Amsterdam in the Netherlands have conducted a study that examines how sugar-reduction strategies affect new-product sales. 

The article, published in the American Marketing Association’s peer-reviewed Journal of Marketing, is titled ‘A War on Sugar? Effects of Reduced Sugar Content and Package Size in The Soda Category’. It is authored by Kristopher O. Keller and Jonne Y. Guyt.

Consumer Health

Photo by Gustavo Santana from Pexels

In the US alone, research shows that reducing sugar in consumer-packaged goods by a modest 8%–10% could lead to nationwide savings of more than US$110-billion in health care costs.

Keller explains: “Despite clear evidence of the negative consequences of sugar consumption, consumers’ intake has steadily increased over the years. This suggests that it is not sufficient for consumers to want to decrease their sugar intake. Companies need to offer appealing products that can help reduce sugar consumption.”

Manufacturers such as PepsiCo have been reducing sugars in their products for some time and are increasingly launching smaller package sizes of well-known sugar products to appeal to health-conscious consumers. 

However, these companies must strike a delicate balance between sugar reduction and protecting and increasing their sales – two motives that will conflict if consumers reject reduced-sugar alternatives. 

Sugar reduction or package-size reduction?

The researchers examine two sugar-reduction efforts:

  • Sugar-content reduction that involves launching a new product that contains less sugar (or no sugar) compared to current products. This tactic is currently being implemented by all major players. For example, in 2011 PepsiCo introduced a new product called Pepsi Next, which contains about half the amount of sugar of Pepsi’s regular products.
  • Package-size reduction that involves brands introducing smaller package sizes that help consumers cut back on their sugar intake. The brand’s average (relative) sugar content remains the same, but consumers’ absolute intake diminishes. 

The study examines the direct effects of these sugar-reduction strategies, while also proposing that their effectiveness depends on three sets of product-related strategy decisions involving labelling, branding and packaging. These decisions have important moderating effects on how the sugar reduction strategy affects sales.

  • First, with respect to labelling, brand manufacturers must decide whether to feature claims of the presence or absence of (un)healthy ingredients, which can signal enjoyment and/or healthiness. For example, Pepsi emphasises enjoyment and highlights the use of sugar in some cases (e.g., “Made with Real Sugar”), whereas Mountain Dew has highlighted the absence of sugars in several others (e.g., “Zero Sugar”).
  • Second, branding decisions determine whether reduced sugar products are launched under a ‘mini’ or ‘diet’ sub-brand, or the main brand. For example, Coca-Cola recently launched zero-sugar products under the main Coca-Cola name, not a sub-brand such as Coke Zero.
  • Third, packaging decisions – such as the number of products per pack – also matter. Single items limit consumption, which is consistent with package-size reduction, whereas multipacks give consumers stock for continued consumption.

Health vs. enjoyment

The analysis of almost 130,000 product additions by nearly 80 brands over 11 years in the US soft-drink category shows that, on average, sugar-content reductions perform comparable to similar, non-reduced products, while smaller package sizes perform better than regular sizes.

It also finds that sugar-reduction efforts work substantially better if they do not overemphasise the reduced sugar content in new additions. That is, sugar reductions perform better without a dedicated sub-brand and with enjoyment-oriented claims rather than health claims. 

As an example, Coca-Cola’s Zero Sugar product was redesigned in 2021 to closely resemble regular Coca-Cola rather than the earlier Coca Cola Zero sub-brand. 

Package-size reductions perform better if presented as a fun, high-quality product rather than a stern, healthy alternative. Using single items rather than multi packs further supports this positioning.

Find out more about the study here.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
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