Britvic outlines steps for QSRs to be levy-ready
As obesity levels continue to rise, the Government implemented the sugar tax.
From April 2018, a new levy will apply to drinks that contain added sugar and have a total sugar content of above 5g per 100ml as consumed. There will be a higher levy applied to drinks that contain added sugar and have a total sugar content of above 8g per 100ml. Excluded from the levy will be pure fruit juices and milk-based drinks that have a milk content of at least 75%.
Russell Goldman, licensed commercial director of foodservice & leisure at Britvic, said, "Health continues to be a major trend amongst consumers and we believe this will be key to unlocking future sales growth within the Foodservice & Licensed channel (FS&L). We firmly believe caterers, operators and publicans can turn this into an opportunity by adjusting their range now and building awareness of the levy amongst customers."
Britvic has taken steps to help consumers make healthier choices - through a long term and extensive reformulation programme, an innovation pipeline focused on healthier products, and marketing responsibly. As a result, Britvic has removed over 20bn calories from its GB portfolio since 2013 on an annualised basis, meaning the company is well placed to respond to the soft drinks industry levy. By April, 94% of its owned brands (72% of Britvic’s full GB portfolio) will be below or exempt from the levy.
Advice on How to be Levy Ready
Health and wellness has been a huge trend in soft drinks for many years already and it’s only going to get bigger when the levy hits in April. Britvic believes that the levy can be turned from a threat into an opportunity by following our key drivers to grow your sales to get more people consuming soft drinks, more often and spending more when they do.
These include the following:
• Motivate more adults to choose soft drinks on more occasions - Adults are increasingly looking for a more sophisticated soft drink specifically for them. Make sure you’re catering for this growing trend by stocking adult soft drinks ranges, such as Purdey’s and R White’s.
• Delivering great tasting drinks with permissible health credentials, giving your guests the confidence to enjoy soft drinks more often - When dining out, 94% of guests will treat themselves, however 74% still search for healthier options so deliver great taste without the calories by offering ranges under the levy threshold or exempt, like Pepsi MAX or J2O.
• Feature soft drinks in more food occasions and enhance the whole occasion - 72% of guests would order soft drinks specials if highlighted on the menus and 80% like staff recommendations of drinks that complement their meal . Whether your outlet offers a full menu or simple bar snacks, offering ideas for the perfect food and soft drinks pairings will help to elevate the consumer experience and spend.
• Maximise current trends to deliver sophisticated drinks, worth paying more for - Premium soft drinks are in 28% value growth, so maximise the mixed drink revolution by offering fantastic mixed drinks and sensational serves to upgrade customers to premium drinks and create memorable experiences.
Britvic’s Levy Top Tips
Britvic recommends following these four steps to ensure your brand is fully levy ready:
• Be Range Ready – Britvic has a great tasting range of drinks for your guests to choose from, that are either below the levy threshold or are exempt.
• Pass on the Levy – Our recommendation is to follow the spirit of the levy and create price differentials between high sugar and low sugar drinks (whether you do this and any onward pricing decisions are entirely at your discretion).
• Engaging Teams – Educate your teams to know the products and facts – they can use recommendations to nudge your guests in the right direction.
• Guest Experience – Provide your guests with an exceptional experience through inspirational choices that are perfectly served.
Reduced Alcohol Consumption
Britvic’s research, conducted by Censuswide UK , indicated that of those consumers who planned to reduce their alcohol consumption last Christmas, 39% consumed less alcohol all year round, increasing to 41% in those aged 25-34 and to 46% in those aged 55+. With figures showing a big decline in alcohol consumption throughout the year, it’s important to stock a dynamic range of soft drinks to cater for this growing consumer interest in soft drinks. Offering a range of inspiring serves and using products like Teisseire to create sensational experiences for customers, both with and without alcohol, will enable you to cater for this peak in demand.
Food & Drink Pairings
The eating out occasion continues to grow with forecasts for 2018 predicting the market will be worth £89.3bn, up from £87.9bn in 2017 . This isn’t just about the 72,682 restaurants in the UK, there are also 46,740 pubs and bars to take into account and the marketplace continues to become more and more competitive. With rising inflation putting pressure on disposable incomes, as well as the increasing number of delivery offerings, food-led operators will need to work harder to protect their share of consumer footfall. Outlets must stay relevant by delivering the right experience to their guests, with the food and drink offering integral to this. The taste of your drink can impact the flavour of your food and vice versa so, if you don’t get the pairing right, it can be detrimental to the overall consumer experience.
The established ‘foodie’ culture and the extensive breadth of high-quality outlets at all price points is likely to see the appetite for eating out continue further still. In fact, the average spend per visit is forecasted to continue to grow +6% in 2017, only slightly slower than in 2016 . Evolving habits and consumer trends, geared towards a healthier and balanced lifestyle, also means soft drinks now have an even greater role to play than ever before. As a result, offering a sensational experience should also be focused around ensuring you have the right range of low and no alcohol drinks that consumers are increasingly looking for. The outlets that do this well – offering the right product, served in the right way and at the right time – will be the ones that succeed in this increasingly competitive marketplace.
Evolved Energy
Consumers needing a pick-me-up have for a long time favoured the quick-fix high-energy solution, but lately they've increasingly reject the many existing products in the category because they are dissatisfied with a short-term boost followed by a ‘crash’ in energy. Only one in 33 energy occasions features an energy drink and rejection levels are high with penetration the third lowest in soft drinks – 11% . People are also increasingly worried about the long-term health impact of their choice of drinks, with six out of 10 believing energy drinks are bad for their health.
With a rise in clean and healthy eating, as well as a desire for sustained energy solutions, Purdey’s offers a soft drink that tastes great and appeals to health-conscious consumers looking for an energy boost from vitamins as opposed to added sugar or taurine; making it a cleaner alternative to the established energy drinks brands on offer. With its high juice content, vitamins and botanical extracts, Purdey’s is free from caffeine, artificial colours, flavourings, sweeteners and preservatives. With no added sugar, it is also exempt from the Soft Drinks Industry Levy set to be introduced in April.
Since its launch, Purdey’s has performed incredibly well with penetration growth of over 40% and value growth of 41% . It has already grown to become the third fastest growing energy brand in total soft drinks (+£2.6m YOY) and that growth is set to continue, as the brand has recently added a new 250ml can that is perfect for mixing, especially with gin.
