Reformulate, Rebrand: Companies Respond to Demand for Sugar Reduction

FDA’s mandate that requires the amount of added sugar to be stated on the Nutrition Facts panel will go into effect in July 2018. This change is top of mind for many brand owners who will try to integrate the new recommendation (that calories from sugar should not exceed 10 percent of daily calories or 200 calories from sugar) into their food and beverage products. In response, companies are reformulating and implementing changes to their marketing language to clearly communicate low sugar content and position their products as better-for-you in order to stay relevant to consumers.

Coca-Cola pledged to cut calories 10 percent across its beverage portfolio by 2020. PepsiCo is also working toward reducing calories from added sugar in conjunction with growing its “naturally nutritious" portfolio. They announced in October 2016 that by 2025 at least 66 percent of their drinks will have 100 calories or fewer from added sugar per 12-ounce serving, up from the current 40 percent.

In addition to Coke and Pepsi, Nestlé is prioritizing sugar reduction across products and is hoping to implement a 40-percent sugar reduction in its chocolate. The company is currently seeking a patent for a sugar reduction process that produces sugar crystals that have been described as “hollow," and they plan to use this technology as early as 2018. Brands that successfully develop products with less sugar and/or fewer calories, but that yield the same experience (taste, sweetness impact, mouthfeel, etc.) will be the most successful.

In addition to modifying their product formulations to contain less sugar, these same brands incorporate very specific marketing language around sugar content, some even go so far as to put the terms “low sugar" or “no sugar" into the product name. One prime example is the recent name change of Pepsi Max to Pepsi Zero Sugar in Fall 2016. Smucker’s also employed this marketing technique to help position several of their products as healthier alternatives to their legacy products. One of their lines has a trademarked name of Smucker’s Low Sugar, which is a clever way to circumvent the regulation which prohibits claiming “low sugar" on packaged products in the United States.

Another strategy many brands are undertaking is to develop more than one product line to appeal to the varied consumer preferences around what’s deemed as a healthful product. In addition to the Smucker’s Low Sugar banner of products, Smucker’s introduced another line of fruit spreads called Fruit & Honey with the tagline “naturally sweetened with honey." Despite the fact that honey is more caloric than sugar, this product has fewer calories (and grams of sugar) than Smucker’s legacy jellies and jams. This is a strategy many established brands implement—offering both no or low calorie products targeted toward calorie-conscious consumers and a line of more naturally positioned products for consumers who are not necessarily looking for lower calories but want “clean" ingredients without artificial sweeteners.

The focus on sugar reduction across food and beverage categories will force or inspire companies to think critically about the nutritional profile and ingredient choices of both existing and new product launches. Claims like “only X grams of sugar" and “% less sugar" will likely increase and consumers will also pay close attention to added sugars, and look for the “no added sugar" claim. I am looking forward to seeing how brands will modify their formulations and product marketing as July 2018 gets closer. If you would like to learn more about the sugar reduction landscape, my inbox is always open. You can reach me at [email protected].