The future of soft drinks

Factors like perceived and actual health implications of content, and changes in our demographic structure will determine the most profitable soft drink businesses in the future. As Nigerian consumers becomes more concerned about their sugar intake (see chart 1), those producers who effect the right changes to their existing products, packaging and marketing models will have first mover’s advantage.
A kaleidoscope of patterns emerged when we researched into the expectations, changing tastes and preferences of consumers. One of the most striking is that the Nigerian consumer is becoming increasingly averse to ‘normal sugar variants’ of the soft drinks he has consumed for decades. There is a growing preference for low sugar variants (see chart 2).

Changing tastes in a changing world

Whether it is from the point of view of gender or age, there is the overwhelming shift to low sugar brands (see chart 3 and 4). In terms of age, as individuals grow older; there is this bias for less sugar. The younger generation (which makes up about 42% of the population) has higher preference for low sugar variants.

Unlike in the United States where women are more favourable to low sugar brands, than men. Our research shows that more men (88%) favour low sugar brands than their female (60%) counterparts in Nigeria. In more developed and knowledge driven societies, the desire to maintain a svelte figure drives women to watch their consumption pattern more closely. This trend is yet to take strong root in Nigeria.

Like Selling snow to Eskimos?

We discovered that there is a strong awareness of the existence of low sugar brands in urban centers but an endemic drought in such knowledge in rural areas (see chart 5). Over 70 percent of urban city dwellers (like Lagos, port Harcourt, Benin and Warri) are aware of low sugar brands while less than 40 percent of consumers in less urban places know about low sugar brands.

When we visited Badagry, near Lagos city, even some sellers were ignorant of NBC’s Coca-Cola light. But the consumers were enthusiastic about the prospect of a Cola drink with less sugar. Amazingly, men in such places believe that sugar has negative effect on libidinal levels.

We are of the opinion that selling low sugar is much easier than selling snow to Eskimos. The missing link lies in supply and availability. Clearly, the rural market is largely neglected (see chart 6)
Emerging opportunities

As things stand currently, while most low sugar brands are packages in plastic bottles and sell for between N100-N200/50cl (depending on the location), most Nigerians are more familiar with normal sugar varieties which are packaged in glass bottles and sold for between N50-N100/35 cl. Producers who will act outside the box are those who will seize the moment by repackage low sugar variants into regular glass bottles and hence meet the need of a growing sugar-phobic Nigeria.

Advertising will do a lot of good to skew the market in the direction of this set of producers. In particular, some malt producers have done so already. But jingles which advertise these new brands of low sugar malts and soft drinks as “that malt when get less sugar” or “that mineral when get less sugar” will do a great deal at sensitizing ‘the not so educated consumer’.

Again, is the question of what particular drink has a low sugar variety? Currently, only cola drinks and some malted drinks have low sugar variants. NBC’s Fanta and Sprite do not have low sugar variants neither do SevenUp Bottling Company’s Mountain Dew or Mirinda. The evolution of the market may make it inevitable to produce low sugar variants of these brands in the future.

A few years ago, the United State’s Center for Disease Control linked “excessive intake of sugar drinks to poor diet quality, weight gain, obesity, and, in adults, type 2 diabetes”. Also, Term Life Insurance, an American insurance company published a report which highlighted the harmful effects of excess soda on various parts of the body these concerns will inevitably affect production and consumption in the future.

The identification of a gap in the market is the first inkling of an opportunity. It must not be mistaken that since respondents are willing to pay more for low sugar brands (see chart 7), then it makes business sense to maintain the status quo, the soft drink makers must satisfy changing tastes.

Listen to the king

The customer is referred to as king, so the research process gave room for consumers to bare their minds through an opened question. It must be pointed out that it is difficult to classify all responses to an open-ended question in a research that involved over 1050 respondents. Some of their answers to the question ‘Do you have any advice for the producers’ are below:

• As a health fanatic and fitness freak, I really don’t like carbonated drinks, mostly for their sugar content. But if it is possible to manufacture one with little or no sugar, I’d be grateful. Have you considered using sucrose? It is easily broken down by the body.

• We need to ensure the products are truly low sugar because consumers are often deceived with much noise about product content, what does low sugar mean really? Please tell us the level of sugar in the normal brand and the sugar in the so called low sugar brand.

• Ensure that these products contain what they claim

• Quality control should be taken seriously as particles are sometimes found in soft drinks

• If the drink is tagged low sugar then let them maintain it

• We want natural flavoured drinks with low sugar content and affordable prices

• Both high and low sugar should be produced so that people can enjoy both whenever they like

• Low sugar and normal sugar should be the same price. Coke had low sugar but it dried up in my area, we don’t see it anymore

• Please help me talk to the producers of soft drinks to produce more of low sugar because of my children, their teeth

• Too much sugar leads to hyperglycemia while low sugar in the body leads to hypoglycemia so the producers should come up with products that are with less sugar content

• They should be real when they say its low sugar it should be low sugar. If possible there should be none-sugar

• I prefer carbonated drinks that bubble in the mouth

• Increase the sugar contents in all the drinks

• Sugar is dangerous for adults above 30

• I m indifferent about sugar contents but most adults care, so produce low sugar

• Producers of low sugar versions should make versions of low sugar less expensive
Methodology

We sampled respondents which cut across Nigeria’s demographic stata and asked them questions which bother on the genre of soft drinks they preferred. Questionnaires were distributed via survey sites as well as on a face to face basis. Respondents were drawn from cities including Lagos, Porth-Harcout, Warri, Benin, Onitsha, Yola, Ibadan and Abuja. Rural dwellers were also sampled. Analysis was done using two statistical packages, SPSS and Microsoft Excel for Windows.