Sugar reduction is a big trend, supported by the government and publicised by public health campaigns. The majority of consumers do realise that cutting down on sugar would contribute to better health and weight management. However, compromising on indulgent moments with a chocolate bar of choice is a too big sacrifice for many. Vypr estimates that almost half of consumers buy chocolate bars and blocks more than once a week. This is based on a single answer steer, asking around 600 consumers how often they have bought chocolate in the last three months:
Almost 35% of consumers buy chocolate once in a few days and nearly 15% – almost every day, adding up to half of our panel regarding chocolate as a regular snack, rather than occasional treat. These consumers could be at a higher risk of sugar related health complications, such as obesity and diabetes.
A BMJ publication from the 5th of September suggested that a “snack tax may be more effective than a sugary drink tax to tackle obesity”, a conclusion drawn from substantial research. The BMJ referred to biscuits, cakes, and chocolate sweets as high sugar snacks, recommending a 20% price increase on these products. This recommendation is based on the principles of the sugary drinks tax implemented in April last year, imposing a tax rate equivalent to 24p per litre to soft drinks with more than 8g per 100ml. The government stated that the tax was not intended to directly reduce consumption but to encourage drinks manufacturers to reformulate products to bring their sugar content below the taxable thresholds. In this respect, the tax is viewed as a success a year and a half later, as many sugary drinks have been reformulated. For example, Irn Bru reduced the amount of sugar in their standard product by over 50% and saw sales increase by 8.3%.
We were intrigued to find out how a price increase would change the confectionery market. Big players Cadbury and Nestlé have already come up with chocolate formulations containing less sugar. In July Cadbury launched its Dairy Milk block in a “30% Less Sugar” variant, while Nestlé have just released their KitKat Chunky More – a standard size Chunky bar containing 30% less sugar than its original counterpart as well as “real fruit” and more protein.
Using a Simple Choice steer, we asked our consumer community whether they would pick the classic 110g Cadbury Dairy Milk Chocolate Bar or the 85g Cadbury Dairy Milk with 30% less sugar:
More than half of consumers would stick with the classic option, which highlights chocolate lovers’ unwillingness to compromise indulgent moments in the name of a health benefit. However, 37% of consumers willing to switch to the low sugar version is also a substantial result, confirming that health-minded consumers would also accept a reduction in product size – from 110g to 85g. Size reduction has been a widely used method in confectionery, where reformulation was seen as difficult.
Product price is an additional factor, whose effect Vypr can measure coming into play. Assuming manufacturers decide to pass a 20% tax onto the end consumer, how would that affect shopping decisions? We ran a Split-by-Description steer, showing a picture of a standard Cadbury chocolate along with two different descriptions to two randomly-selected halves of a 541-strong panel:
Both descriptions contain information about size and price. The price of the 30% Less Sugar chocolate is kept at £1.50 as the sugar content and pack size would presumably respond to the new regulation and price increase would not be required. The price of the standard 110g chocolate block is 20% higher, having risen to £1.80. In these circumstances, consumer preferences leaned towards the low sugar version, highlighting that price increase is a strong deterrent from purchases of food and drink which negatively affect consumer health. Switching to a smaller, low sugar option would certainly be beneficial to the 50% of consumers, buying chocolate a few times a week.
As chocolate bars are smaller in size than chocolate blocks, size reduction might not be necessary. Nestle’s brand new addition KitKat Chunky More is a standard size KitKat Chunky, made healthier with the inclusion of fruit, nuts and oats, and most importantly, containing 30% less sugar. We published a preference steer to 2013 consumers, showing them five KitKat options, including the new KitKat Chunky More. The exclusive preference results are shown below, which only take into account consistent choices of the same option every time it had been shown:
KitKat Chunky More is likely to gain a solid following among KitKat Chunky lovers. It is on a par with the popular Salty Caramel and Peanut Butter options, while only the original option stands out as a top preference that the new bar cannot beat. It remains to be seen whether an imposed price difference would further change this ranking.
React quickly to regulatory changes in your industry by measuring the effect a tax-imposed price increase would have on your product. Vypr can give you timely feedback on return on investment in new product attributes that would mitigate such developments.