Although it’s done a good job diversifying its product portfolio to include healthier options in recent years, there’s no escaping the fact that Coca-Cola is the main target of the UK government’s newly announced sugar tax.
So when Leendert Den Hollander, Vice President & GM GB, Coca-Cola, was first up on stage at day two of Retail Week Live – the day after the budget announcement – the post-talk interview was bound to be no holds barred.
We should start by saying that Den Hollander wasn’t planning to talk on the sugar tax; his session focused on how to make a 130-year-old brand stand the test of time. However, the measures being implemented to tackle health issues, such as diabetes and obesity, are a poignant reminder that a brand must evolve with the world in which it lives in order to survive.
‘Do you feel the chancellor has shafted you?’ wasn’t exactly the most diplomatic way of phrasing the question, but one audience member’s comment echoed the sentiment of the room.
The sugar tax was a bit of a surprise, but the fact they’re tackling this issue wasn’t a surprise, was Den Hollander’s reaction. However, he disagrees with the taxation of sugary drinks in principle. If obesity is the starting point, then we need to work towards eradicating it, and making ‘full fat’ fizzy drinks more expensive will not provide the solution, in his opinion.
Instead, Coca-Cola is continuing forward with its health and wellbeing messages, which Den Hollander believes will help the brand collaborate more closely with the consumer. People still want to drink fizzy drinks, but they should be given a choice of low or no calorie options – hence the reformulation of the Coca-Cola core range to include Zero and Life as well as Diet Coke. Coca-Cola is also exploring a vending machine where consumers can design their own drink, tailoring a number of options including flavour and calorie level (in the sense that users can select a ‘light’ option as their chosen drink).
The other key instrument for change is education. In the case of Coca-Cola, Den Hollander believes there is still work to be done; only 48% of consumers currently realise there are no calories in Coke Zero. The brand also wants to put more weight behind promoting its wider portfolio, as Coca-Cola also produces Smart Water, Abbey Well, and Schweppes juices and low calorie sparkling drinks among others. Although it has tackled the sugar tax issue head-on through its UK website.
How the sugar tax impacts Coca-Cola’s sales remains to be seen, and Den Hollander wasn’t keen to make predictions at Retail Week Live. However, given that the brand is now so well loved that they don’t even need to put the logo on the label (as shown in the ‘share a Coke with…’ campaign) and the Coke Christmas train is synonymous with the start of the festive season, it’s going to take more than a legislation to topple this soft drink centenarian.