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Sugar concerns sour soft drinks sector

Sales of carbonated soft drinks (CSD) in Australia are under continued pressure as consumers reconsider their sugar intake, new research shows.

Research by global market intelligence agency Mintel shows that total volume sales of Australia’s CSD category are expected to decline 2.3 per cent in 2017. CSD sales in 2016 dipped 4.7 per cent from 2014.

Mintel research indicates that negative sentiments towards sugar have driven many Australians to reconsider their sugar intake. One in three survey respondents said they limit the amount of sugar or sugar substitutes in their diets, while three in 10 avoid items with sweeteners. As many as three in five Australians said they are limiting their consumption of sugar and sugar substitutes in an effort to watch their weight, while over half do so because of health concerns, such as the worry of developing diabetes.

Jenny Zegler, Global Food & Drink Analyst at Mintel, said many consumers are now focusing on sugar and sweetener content when choosing food and drink, with some limiting the amount of sugar or sweeteners in their diets.

Those concerns had especially taken a toll on Australia’s CSD category, which is forecast to see further sales declines by the end of 2017. “Carbonated soft drink companies that seek to reconnect with consumers must take into account that concerns about sugar and sweeteners will continue to be a focal point for consumers moving forward,” she said.

While personal preferences for or against sugar or specific sweeteners may vary by the individual, it appears many Australians have a desire for more clarity around sugar content. More than three in five metro Australians surveyed said they felt cheated when a company was not clear about the high sugar content of its products. As many as three in four said food and drink companies should make it easier to understand how much sugar is in their products.

Shelley McMillan, Trend & Innovation Consultant, ANZ, at Mintel said the research pointed to a need for simple and direct communication.

“Currently, the provision of front-of-pack sugar descriptions by carbonated soft drink companies are few and far between,” she said. “This challenges more companies to be transparent in their claims.”

Mintel research shows that consumers think manufacturers could be more aggressive in creating reduced-sugar formulations, with three in four metro Australians agreeing that food and drink companies should do more to reduce the amount of sugar in their products.

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