Energy drink brand Lucozade is the latest victim of the UK’s sugar tax, with trade press reporting a dramatic sales drop in the UK after reformulating to cut sugar. This demonstrates the vulnerability of classic branded soft drinks when it comes to changes in formulation.

Trade magazine The Grocer reported that sales of Lucozade fell by 8.4% following a change in the recipe to contain less sugar, leading to a loss of more than £25m in the past year for the brand.

This comes almost 12 months after LRS, the owner of Lucozade, decided to reduce total sugar content to 4.5g (1 teaspoon) per 100ml across the company’s soft drink portfolio. The company was confident that advances in sweeteners would help produce the same tasting soft drink with far less sugar.

However, the sales drop tells a different story. Consumers have criticised the taste of the product after the reformulation, complaining that the new recipe did not taste the same as the original.

Reformulation is risky, particularly for classic products

Lucozade’s plan to reduce sugar content is a natural move to avoid being taxed and is in line with consumer demand for healthier drinks. However, the sales decline and customer dissatisfaction as a result of the reformulation seem to be a bigger loss to the brand than the sugar tax, both in terms of finance and brand reputation.

The reformulation failed to replicate the product’s original taste, which is almost an inseparable part of the iconic brand image. Lucozade’s strong brand familiarity is what has set it apart from its competitors. So when consumers say the product does not taste the same as before, Lucozade has lost its appeal.

GlobalData found that in 2016, 73% of British consumers said that how familiar a product feels influences their choice of beverage.

Lucozade’s experience shows that there’s still a long way to go for sweeteners to fully replicate the taste provided by sugar. Drinks companies are stuck in an awkward place – governments and consumers are pushing for them to offer healthier drinks; yet consumers then punish brands that reformulate but are, unsurprisingly, unable to replicate the exact taste.

Lucozade will need to go back to the drawing board in order to see if it can reformulate again, and more closely emulate its original taste. It will also need to invest strongly in its brand image to give the consumers it has lost a new reason to drink it.

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