Coca Cola South Africa reduces sugar across core brands
People generally find it difficult to respond to policy driven interventions, directing people’s behaviour towards more healthy lifestyles requires an understanding of the nature of what motivates people as well as the social and economic pressures they face in the real world. When it comes to obesity, this means a tax on sugar-sweetened beverages is unlikely to be the most effective way to change behaviour. Instead, a portfolio of interventions and holistic strategy are needed to encourage the reduction of sugar consumption.
The McKinsey Global Institute report on obesity shows that portion control – in other words smaller bottles and packages - followed by reformulation (less sugar in each bottle) are the most effective in reducing obesity. Taxes on sugar-sweetened beverages (SSBs), the report shows, are not nearly as effective. In fact the research found that SSB taxes rank in the bottom quartile when it comes to effectiveness. Some developed markets which introduced this type of tax are now reversing these
taxes, due to their failure to effectively address the disease. The effectiveness of a tax on SSBs, aimed at singling out one food item in addressing this complex
and challenging issue, must be questioned. There is surely a better way. Government could implement a regulatory framework instead of a punitive and regressive tax. In practice, this would be easy to implement – regulate the sugar content and have in place an independent monitoring system to ensure industry adheres to commitments made and timeframes, as well as to eliminate free-riders.
While debate around the SSB tax continues, Coca-Cola Beverages South Africa’s (CCBSA) focus has been on driving reduced consumption of sugar. The strategy, which has been in place for several years now, focuses on three areas: increasing the marketing and variety of Diet, Light and Zero sugar alternatives to popular brands; introducing smaller pack sizes to encourage portion control; and reformulating the recipes of certain brands by reducing the sugar content. Our retailers are on board and these sorts of promotions are generally supported by point of sale posters in the stores. These strategies are beginning to work on the ground. Already consumers are responding to a combination of price incentives and awareness marketing and switching to lower calorie brands. An advertising campaign shows zero calorie beverage options of popular brands and CCBSA is currently selling zero sugar variants a little cheaper than regular variants across its brand portfolio to
encourage people to try the zero sugar offerings. As a result, this marketing/pricing combination has led to a significant increase in sales of lights and zeros.
Reformulation efforts have seen sugar reductions across key brands. We have a holistic strategy to reduce the overall sugar content across our portfolio of beverages over time. The Coca-Cola system efforts will drive down the average unit sugar content across the portfolio by 22-24%, by the end of 2018. Some of this will be achieved through switching consumers from regular to zero sugar versions of our brands. We are also reviewing all of our recipes and formulas for our regular products and reducing the sugar content in these recipes where it makes sense to do so. Simultaneously the company continues to introduce a range of smaller pack sizes. It has already completed the discontinuation the 2,5 litre size Coke, while decreasing the 2,25 litre to 2 litre for 2 Coke and core flavours, as well as the 500ml bottle (to 440ml) and the 330ml (to 300ml). It is also expanding the production of the 1,5 litre as an alternative to the 2 litre bottle.
Another important element of any campaign to change health-related behaviours is education and information. CCBSA was one of the first companies in South Africa to voluntarily put nutrition labelling on its bottles over eight years ago. Since 2011, bottles have also included fact-based Guideline Daily Amount (GDA) labelling.
However, in the absence of a massive nationally led education campaign informing consumers about their sugar intake, this information is not easily understood. A call for government to work with CCBSA to educate and inform South Africans was made at the recent parliamentary hearings into the proposed tax.
The promotion of sugar sweetened beverage taxation will have very limited health benefits but could have serious unintended economic consequences and lead to job losses. Government, industry and civil society need to work together to create solutions that provide the desired health outcomes as well as economic opportunity, instead of economic risk. Let’s choose the better way.
Velaphi Ratshefola is the MD of Coca-Cola Beverages South Africa