ASIA May 2019
Sugar & its impact on the Soft Drink Market
Extensive research and scientific studies in the past 10 years have proven that the main cause of obesity and diabetes can be effectively linked to the intake of sugar in a person’s diet.
In the past few years, governments all over Asia have implemented or proposed new regulations mainly in the form of new tax laws to curtail consumption of sugary drinks, while some have even considered implementing a blanket ban on drinks which contain an excessive amount of sugar. This indirectly motivate soft drink producers to reformulate their products by replacing sugar with healthier alternatives or to reduce the amount of sugar in their existing products.
All these are expected to impact the future direction of this industry as manufacturers seek to develop new products which are healthier but taste just as good, not only to satisfy consumers but also the various regulatory authorities, while at the same time, able to position their products better in the marketplace against competitors.
Mintel latest research has shown that the average sugar content in sugary drinks is falling in all regions across the globe from the period 2014 to 2018.Refer to Chart 1.0 for more information.
Meanwhile, in the Asia Pacific, there is an overall decline in sugar level in soft drinks from 9.51g per 100ml in 2014 to 8.72g per 100ml in 2018. The following chart 2.0 looks at 3 countries in the region which has the highest consumption of sugary drinks. Mintel research showed that Malaysia consumption of sugary drink did not drop much from 2014 to 2018 whereas its neighbours, Philippines and Thailand had seen quite substantial drop in consumption mainly due to their newly-implemented tax laws on sugary drinks which took effect in 2018. At the time of this study conducted by Mintel, Malaysia has not yet implemented the tax law on sugary drinks, but we expect the consumption level to decline substantially in the following year (2020) with the proposed implementation of sugar tax on soft drinks on 1 July 2019.
In fact, Mintel research showed that up to 15% of new product innovations in 2018 relating to soft drink in Malaysia has low/no/reduced sugar claims compared to only 12% in 2014. Some of the recent product launches in 2018 included F&N 100 Plus (reduced sugar original isotonic drink) and Yeo’s Winter Melon Drink (25% less sugar than regular Asian beverages) amongst others. These clearly showed that some manufacturers have already started to reformulate their products in preparation of the new tax law. (Refer to Chart 2.0)
As most governments in Asia seek to curtail consumption of sugar-laden beverages, this might also open a huge market opportunity for sugar substitutes like stevia and other healthier/natural sweeteners to assist in new product formulations.



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