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Coke on sugary drinks ad restriction: How should brands market in this space?

While Coca-Cola Singapore supports MOH’s recent call for in the fight for diabetes, it has reportedly voiced its concern that the proposed ad restrictions and tax proposed by Ministry of Health (MOH) yesterday is not a “good solution“, according to The Straits Times. However, calling it its shared responsibility, Coca-Cola Singapore said it does support the move towards reducing calories and sugar.

While Coca-cola did not share its views on the proposed ad restrictions when contacted by Marketing, a spokesperson from the company did say that the brand recognises the issues of diabetes and obesity in its consumers and is also looking for ways to anticipate and satisfy consumers’ desires and needs through their feedback. It added that Singaporeans request for drinks that “taste great” but contains less sugar content and fewer calories.

In line with these suggestions from its consumers, the brand said it is “rethinking” its recipes to cater to the needs and wants of consumers, while continuously innovating to launch new lower or no-sugar drinks.According to the spokesperson, 60% of its portfolio in Singapore fall into the lower and no sugar categories. Last year, the soft drinks manufacturer was among the top seven beverage companies in Singapore that participated in an Industry Pledge to commit that it will not have drinks with more than 12% sugar in its portfolio of sugar-sweetened beverages by 2020. Furthermore, the brand also committed to reducing the sugar content in its overall portfolio of sugar-sweetened beverages by 10% by 2020.

Following its pledge, Coca-Cola launched several new lower and no-sugar drinks such as Coca-Cola Stevia in March this year. Coca-Cola Stevia was created as a lower-sugar cola, with 35% less sugar using a combination of sugar and the stevia leaf extract. In addition, in May this year, the brand also introduced a new line of ready-to-drink teas, called Authentic Tea House, with lower or no sugar. These include Japanese green tea, Ayataka, oolong tea Da Hong Pao and chrysanthemum tea, Jin Ban. Coca-Cola also launched an updated recipe of Sprite, Fanta Orange and Fanta Strawberry in June 2018, which contain more than 40% less sugar.

“Coca-Cola Singapore is on track to meet our pledge commitments. Going forward, we will continue to rethink many of our recipes around the world and in Singapore to reduce sugar, because while sugar in moderation is fine, too much of it isn’t good for anyone,” the spokesperson said.

The measures that MOH proposed include front-of-pack nutrition labelling, advertising regulations, reducing availability of sugary foods and drinks in schools and public institutions, as well as excise duties on sugar-sweetened beverages (SSBs). MOH said that the introduction of the mandatory front-of-pack nutrition label on pre-packaged SSBs will allow consumers to identify the range of “less healthy” SSBs, and also complements the existing Healthier Choice Symbol programme. As such, there will be measures to regulate advertisements of less healthy SSBs in the mass media, including on online channels, to reduce the influence on consumer preferences.

Marketing in the sugar-sweetened beverage category

Given that the move could result in companies playing in this space needing to rethink their creative marketing strategies, Marketing spoke to creative experts on how brands can make the best out of the situation.

Craig Mapleston, director, VCCP APAC said that while the proposed measures could mean tough times for manufacturers and marketers, it is clear that products and marketing will change. He added:

Brands that wait for the outcomes and then try to flex their approaches will get left behind from those who can see the writing on the wall – and move now.

Mapleston also drew a comparison to the regulatory requirements that are imposed on alcohol brands, saying  that “responsible drinking” campaigns and platforms will be adopted by sugary drinks.”These campaigns deliver against a CSR obligation and work to lobby regulators for sure. Moreover, effective responsible drinking campaigns deliver on brand visibility and story-telling in equal measures,” he added.

And if advertising is restricted from screens, the clever brands will move their battle front to the retail environment, Mapleston added. While the category has always been good with retail communications, but this is going to be even more key now – not just with BTL communications aimed at consumers, but strong trade programs that provide real value to retailers will become more and more important.

“Getting retailers up to speed with new regulations and the resultant new product lines will be an important role of brands.  And then providing long-term business value to retailer, beyond the typical rebates and discounts, will become the focus of drinks brands, just as it has for alcohol and tobacco brands,” he said.

Meanwhile, co-founder and group ECD at BLKJ, Joji Jacob chimed that this is a “great opportunity” for brands.

“Reduce sugar content (after all, where’s the profit in a dead consumer?), work with the Health Promotion Board to gain the coveted Healthier Choice accreditation, and advertise the hell out of it. The first one out of the gate wins,” he added.

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