Beverage companies weigh viability of reduced-sugar drinks
New guidelines for sweetened beverages in schools and government health facilities took effect on January 1, but there is lingering uncertainty in the market as to whether reduced-sugar drinks can effectively compete against flavoured water beverages and plain water.
Interim guidelines for beverages from the Ministry of Health & Wellness, MOH, now mandates that the beverages being sold in schools and state-run health facilities must contain no more than four grams of sugar per 100 ml, down from the 5 grams permitted during the year 2020.
Distributor Derrimon Trading Company has registered its Kool Kids, Busta Chill, Juiciful Vibez and flavoured water line with the MOH, while beverage maker and distributor Wisynco Group is compliant with its no-sugar-added juices made by its partner Trade Winds Citrus, and imports such as Mott’s Apple Juice.
Wisynco, which otherwise distributes a range of soft drinks and other beverages, is also positioned to capture sales in schools through its Sparkling WATA and flavoured WATA beverages.
CEO of Derrimon, Derrick Cotterell, told the Financial Gleaner that the take-up of his company’s reduced-sugar content juices has been going fairly well so far, and anticipates that there is enough space in the market for reduced-sugar beverages to compete with the variety of flavoured water on the market and numerous brands of plain water, once COVID-19 subdues and schools reopens.
For Lasco, the reaction from the market to its reduced-sugar product has been different.
Push for healthier beverage
Before, there was a big push on the market for healthier beverages in schools and public places, which sparked the release of various flavoured water products by beverage traders, large manufacturer Lasco had come to market with the iCool brand, a sweet fruit-flavoured drink released in 2016 that was a big hit with both schoolchildren and adults.
Lasco later introduced a reduced-sugar variant of iCool to meet the guidelines of the ministry.
“Overall, we have seen a little shift towards plain water. Our trading partners have been buying the reduced-sugar iCool but we have very few vendors, like the small shop operators, that’s purchasing the products,” Beverage Marketing Manager at Lasco Distributors, Danielle Cunningham, told the Financial Gleaner. Lasco Distributors markets products made by sister company Lasco Manufacturing Limited.
“Our main market from the reduced-sugar drink is in schools. The shift in trade is not happening as quickly as we thought it would. There are select locations where we have good sales, but those are few and far between,” she said.
Lasco’s iCool sweetened drinks is still the top beverage earner for the company. But since the health ministry’s islandwide drive for a healthier lifestyle, the company said it has seen a shift in sales towards other iCool lines, including the flavoured water and plain water.
The policy shift towards reduced-sugar beverages in schools and government health facilities started with a Draft National School Nutrition Policy from the MOH back in October 2018. It came against the background of increasing concerns of non-communicable diseases such as type two diabetes and overweight/obesity, particularly among children aged six to 10 years, and by 2019, manufacturers were ordered to cut the sugar content in beverages to six grams per 100 ml.
The goal was to create a school environment that promotes and facilitates healthy eating habits and a physically active lifestyle among students in Jamaica. To get the ball rolling, the Government sought to implement changes in areas where it had greater control, the schools and other state-controlled entities, with the expectation that over time the rest of the market would follow and eventually adopt healthier consumption habits.
Schools are one of the biggest markets for beverage companies in Jamaica.
Caribbean Flavours & Fragrances Limited, CFF, which trades in food and beverage flavourings and personal-care products, was the first company out with a sugar-reduction substitute called FlavourFit, which aimed to leverage income from the policy shift.
But FlavourFit has not achieved the take-up expected from local beverage makers.
Meanwhile, beverage makers say the reopening of schools, now being phased slowly after a sustained lockdown to keep COVID at bay, will serve as a test of market tolerance for the healthier drinks.
More of that forbearance will be required over the next two years. By January 1, 2023, manufacturers would have been required to reduce the sugar content in their beverages to 2.5 grams per 100 ml.
Lasco plans to roll out a reduced-sugar flavoured water beverage by March 2021, which will meet the standard that will be implemented in 2023. It’s also putting out a 500ml reduced-sugar iCool, targeted at secondary and tertiary-level students.
Chairman of Wisynco, William Mahfood, says his company will also be coming out with new products to meet the current sugar content recommendations.