Soft Drinks Face Continued Challenges

The soft drink world has faced constant problems in recent years, all stemming from a perception and link towards increased obesity rates in America. With soft drinks being traditionally high in sugar, they find themselves in the crosshairs of politicians and dietitians. While New York avoided a “sugary drink tax,” the concept has not disappeared.

The International Business Times reports that New Zealanders find themselves in support of limiting the amount of sugar that can be included in soft drinks. 46% surveyed “definitely” support a limit, while 32% “possibly” do. Less support the concept of taxing sugary drinks, but 46% agree on a tax. A greater 59% prefer a limit on serving size. While New Zealand has no plans to introduce a tax (and Coca-Cola claims that it “cannot solve the obesity crisis”), the World Health Organization does cite the country with one of the worst increasing obesity rates and fast-food consumption. Taxing sugary drinks would help curb obesity, if only to encourage people not to drink them.

A tax has been proposed for Illinois, though. Akin to the New York proposal, it would tax any sugary drink, adding one cent per ounce, and would add a $2.88 tax to each case. Companies and retail establishments fear the loss of sales from the drinks, especially when the tax on a case of drinks might be about the same price as the case itself. California is also proposing a bill, SB 1000, that would require a warning label on any drink that was sold in stores with added sweeteners, featuring 75 or more calories per 12 ounces stating “STATE OF CALIFORNIA SAFETY WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay.” For restaurants with self-serve drinks, it would be on the dispenser. Restaurants that keep drinks behind the counter would feature it on the counter. While many companies have featured voluntary labels listing calories on bottles, many are opposed to this new enforced labeling.

It may not require taxation or special labeling to curtail the consumption of sugary drinks. Coca-Cola reports that 2013′s revenue was not as what was expected: global sales did not rise as much as they wanted, and US sales actually lowered.

Coca-Cola said on Tuesday that global sales volumes rose 1 percent in the quarter and 2 percent for the full year. Volumes in North America fell 1 percent in the quarter, while those in Europe grew just 1 percent as consumer spending remained subdued.

Coca-Cola is joined by Pepsi in reduced sales in America and other developed nations, as people reach for healthier options. In hopes of improved sales of their drinks, Coca-Cola bought a 10% stake in Green Mountain Coffee Roasters, known for their Keurig coffee makers; Coke is looking to use their technology and mindset to develop an in-home beverage dispenser. Meanwhile, they look to save $1 billion in productivity improvements, and will funnel that money towards advertising.

Have you noticed a slip in soft drink sales in your restaurant, and do you have any plans to combat that? How would you handle taxes or new labeling requirements?