Sector News

‘How can brands protect themselves from future regulatory changes?’

April 4, 2018
Consumer Packaged Goods

Sugary drinks are no strangers to being cast as villains when it comes to health and environmental concerns. Tabloid reports of a British teacher quitting her job, blaming out-of-control schoolchildren high on energy drinks for ruining lessons, is the latest brickbat used to bash the sector.

The voice of celebrity chef Jamie Oliver has joined that of MP Maria Caulfield in calling for bans on energy drinks for under-16s. Supermarkets Waitrose, Asda and Aldi have already announced measures to limit sales of the drinks.

An even more widespread piece of regulation should be of more immediate concern to drinks firms – the imminent soft drinks sugar levy, which brands must register for by 6 April. Drinks companies will have to pay an £0.18 per litre levy on drinks, rising to £0.24 per litre for drinks with more sugar in them, and there is an almost identical rate for Irish firms.

For manufacturers also being demonised over concerns about single-use plastic packaging, it must be tempting to despair. They are not alone in facing an increasingly restricted and regulated environment where their legitimate tools of promotion are being curtailed.

Tobacco is the obvious cautionary tale. Where tobacco was forced to go, alcohol, confectionery, fast food and soft drinks will inevitably follow. This isn’t simply catastrophising – around the world governments are already banning advertising in these areas, preventing other forms of promotion, and compelling brands to introduce labelling that spells out how undesirable they are. No wonder brands are in despair.

However, doing nothing is not an effective strategy. Many brands stand unprepared or are in denial, when there are actually some practical moves that they can take right now to prepare their brands for the worst when markets ‘go dark’.

Brands need to understand their most effective brand assets, which are not always the transient campaigns that may only serve for a year or two. Ugly Drinks, which produces a range of fruit-flavoured sparkling waters in cans, has invested in an unmistakable design that leaps out at the consumer. Belu water, which returns all its profits to charity, has developed a distinctive and stylish glass bottle that sends a message that the brand is aspirational as well as ethical. These design assets communicate with consumers, without them even realising it. All brands have these hidden persuaders, and need to understand what they are to protect against future advertising restrictions.

Heavyweight branding activity pays dividends down the years. Think of ‘You’ve been Tangoed’, ‘Secret Lemonade Drinker’, and ‘Totally Tropical’ – ad-created communications that have placed brand shorthand in the consumer’s mind, and keep working down the years.

Trade relationships will become even more important, so now is the time to demonstrate your commitment to the sector. Stores increasingly look for activity that does more than drive business for a single brand. Meal deals, which bring together several brands, providing a useful solution for the consumer and boosting their spend in-store, are a great way to get retailers on board by driving footfall.

The sugar tax shows how quickly the rules can change for brands. Investing ahead of potential marketing regulations acts an insurance policy that almost always pays off. It allows you to undertake a brand, product portfolio and marketing communications ‘health check’ and examine potential scenarios, as well as your response. It is what progressive brands should be doing anyway, but in the present environment it is even more important.

By Neil Davidson, Managing Director, Heyhuman

Source: FoodBev

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