SDIL Special
Each month the Sharp team saves you time by rounding up some of the latest trends and insights from the world of food and drink. It’s designed to help brand founders use trends, fine-tune your messaging and increase your brand awareness.
This month we dive into the Government’s proposed revisions to the Soft Drinks Industry Levy (SDIL), taking a look at what this means for drinks brands and what the industry reaction so far has been.
In the spotlight, we cover the Ozempic effect and what the cyber-attacks mean for our producers.month
What is the SDIL?
It’s a tax on pre-packaged soft drinks with added sugar, which came into force in 2018. It currently only applies to qualifying drinks with at least 5g total sugar per 100ml.
With growing pressure on government to take decisive action to combat obesity and diet-related illness in the UK, the government has now entered into a consultation period on proposed changes to the existing SDIL or sugar tax as it has become better known.
What is the government consulting on?
Proposed changes to the SDIL, as it currently stands, include:
- Reducing the minimum sugar content at which the SDIL applies to qualifying drinks from 5g to 4g. This will bring nearly 900 products into scope.
- Removing the exemption for milk-based drinks whilst introducing a ‘lactose allowance’ to account for the natural sugars in the milk component of these drinks.
- Removing the exemption for milk substitute drinks with ‘added sugars’ beyond those sugars derived from the principal ingredient, such as oats or rice.
The artificial Frankenstein Funnel
For soft drinks brands who have already spent millions reformulating this is a major blow. What’s more, for the brands that prioritise natural ingredients over artificial sweeteners, many feel it’s the final straw in terms of funnelling brands down the artificial route in a bid to remain price competitive and meet consumer taste expectations.
Soft drink manufacturers have expressed their dismay. In an article published in The Grocer, natural-ingredient-led brand Fever Tree highlighted that the government risks decreasing the options for consumers when it comes to natural choices.
If you’ve recently tried to buy a fruit cordial or squash concentrate, you’ll know that most of the mainstream brands on supermarket shelf are labelled ‘no added sugar’, cue intense ingredient label scanning for those of us looking to avoid artificial ingredients. The point is that consumers who prioritise natural ingredients are already struggling with a lack of options and are then forced to pay a premium for it. Surely this is only going to get worse.
Dairy drinks under scrutiny
Given the high added sugar levels in many milkshakes and iced coffee options on the supermarket shelves, isn’t it about time that dairy drinks came under the same scrutiny when it comes to sugar content? After all, many are consumed by older children and teenagers, who have developed a taste for sugary products.
According to the BBC: “Some 203 pre-packed milk-based drinks on the market, which make up 93% of sales within the category, will be hit with the tax unless their sugar content is reduced in accordance with the proposals, government analysis says.
One of the main concerns for dairy drink brands must be whether the lactose allowance to account for the natural sugars already present in milk will go far enough in ensuring their products fall under the tax threshold.
But what about the brands who are already doing better by prioritising natural ingredients and minimising added sugar? Andrew Douglas from cold brew RTD brand Hunt and Brew makes an interesting point in his opinion piece for Food Manufacture. He welcomes the move but argues that the government needs to build in some incentives such as a clean label certification or a tax credit for those brands already prioritizing health with no added sugars and transparency when it comes to ingredients.
While this proposed extension will be a step in the right direction for improving health outcomes for UK consumers there are some definite red flags: forced movement to artificial sweeteners as part of reformulations and the complexity of naturally occurring sugars versus added sugars, which makes for an unlevel playing field.
In the spotlight:
Retailers under attack: We’re all feeling the effects of devastating cyber-attacks on M&S and the Co-op in recent weeks. Supply chains have been significantly impacted, and shelves are bare. It’s like Covid all over again, and the ripples are still being felt across industry as beleaguered retailers navigate data theft and face lawsuits. If you’re being affected by the cyber-attacks keep communicating with your suppliers and customers to keep everyone in the loop.
Weight loss enters a new era: Weight Watchers came a cropper recently sounding the death knell for calorie restricted diets and low-quality processed foods that are low in sugar and salt. The rise of GLP-1 drugs such as Ozempic, as well as the never-ending slew of eating regimes that focus on nutrient dense foods and prioritise high-quality whole foods have inevitably played their part in its demise. We’re already seeing restaurants and cafes serving up more small plates, slices rather than whole pizzas, and smaller serves in general, to align with consumer demand for quality over quantity and appetite appropriate portions. Do you think it’s good or bad? What will big food do now that the demand for unhealthy junk foods is waning?
And finally...
Spicy science: If you’ve ever regretted adding that extra teaspoon of chilli to your recipe then you might be interested to hear that scientists at Ohio State University have identified compounds in less spicy chillis that take the edge off the intensity of the spice factor. But we’re asking, why would you want to?
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