The impending sugar tax in April provides natural beverage companies with the ideal opportunity to grow market share and capitalise on the disruption the legislation is causing to the wider soft drinks industry.
It’s important to note that the Office for Budget Responsibility has recently forecasted revenues from the sugar tax in 2018/19 will be less than half of what was originally predicted - £240m from initial estimates of £520m.
This is a result of several soft drinks brands focusing on reformulating their existing products, meaning they will be exempt from the tax, or that they have been putting their energies into new product development.
Therefore, there is an enormous opportunity for the natural beverage supply base, in that the consumer is driving this. Taste, quality, traceability and trust with the consumer is where the battle will ultimately be won or lost.
Demand for natural and healthy products has never been higher and the natural beverage industry is starting to wake up to the opportunities on the horizon. The health benefits have always been apparent, but what we are now seeing is a much higher level of innovation in terms of flavour and format, but the products have to be affordable.
From our perspective, Coco Fuzion 100 taps into this trend perfectly as it contains naturally occurring, highly hydrating electrolytes with no added or sugar or preservatives. Coconut water is a centuries-old health phenomenon and we have adapted it to 21st century consumer requirements, including carbonation and pack size.
The global market for coconut water is estimated to increase from $2bn in 2016 to over $7bn in 2021. The key for us relating specifically to coconut water is now showcasing the wide-ranging benefits coconut water offers, not just to the health-conscious, but to everyone.
Fundamentally, for the natural beverages industry the long-term opportunity is not necessarily the sugar tax. It is the enormous adjustment made by the consumer towards healthier living and a greater understanding of the beverages they and their families drink.
Steve Barton is CEO of C7 Brands