When the Soft Drinks Industry Levy (SDIL) was announced in March 2016, its projected revenue was more than £500 million. However, Gavin Parlington, director general of the British Soft Drinks Association (BSDA) revealed in a webinar on 30 January 2018: “Early last year that forecast had been reduced to £385 [million] and it is now forecast at £275 million.”

The beverage industry’s response to the SDIL was to speed up the reformulation of soft drink products. The reformulation of soft drinks means products will no longer contain enough sugar to be subject to the levy. Driving reformulation was one of the initial objectives of the UK Government in introducing the SDIL, according to Parlington.

Brands that have chosen the reformulation route, such as Coca-Cola and Britvic, as well as large retailers who produce own brand soft drinks, have noticed from research into consumer behaviour that taste should be the priority when crafting lower sugar alternatives.

Britvic managing director, Paul Graham, noted this trend, saying: “I think all our research tells us taste is the number one reason people choose a product, but it is also the number one reason people don’t choose a product…Taste is so important in all of this; we have to make sure that as an industry that we are still producing great-tasting products.”

Philip Banks, Tesco soft drinks buyer, added: “I think the key learning for the industry has been that taste is massively important…Getting the taste right is almost more important than taking the sugar out.”

He continued: “Although since January 2016 we have reformulated more than 2,000 of our own label products…we only ever do it if the product that we produce is good or better in terms of taste or quality credentials.”

According to industry experts, as a result of the reformulation crusade undertaken by soft drinks manufacturers since SDIL was announced, it is possible that the UK Government could apply a similar levy to other beverage and food categories.

Graham said: “What I think they [the government] will look at from soft drinks is the level of reformulation that was driven through manufacturers is probably higher than they expected; that was the encouragement of the levy that got people to that position…I would imagine that they would be looking at other categories who have got high levels of sugar and thinking okay does this blueprint move across.”