Australia’s carbonated soft drink (CSD) market is experiencing ongoing challenges due to consumer worries about sugar content, as reported by Mintel, a global market intelligence firm.

Mintel predicts that the total sales volume of CSDs in Australia will likely decrease by 2.3% in 2017, following a 4.7% drop from 2014 to 2016.

Mintel’s research suggests that growing awareness of sugar’s negative effects has prompted many Australians to reevaluate their sugar consumption. A significant portion of Australian consumers in metropolitan areas (34%) report actively reducing their intake of sugar and artificial sweeteners, with 29% avoiding these ingredients altogether. The primary motivators for this shift are weight management (cited by 58% of Australians) and concerns about potential health risks like diabetes (reported by 53%).

Jenny Zegler, Global Food & Drink Analyst at Mintel, highlights the impact of these health concerns: “With concerns about obesity rates and overall health in Australia, many consumers are now focusing on sugar and sweetener content when choosing food and drink, with some limiting the amount of sugar or sweeteners in their diets. These concerns have especially taken a toll on Australia’s carbonated soft drinks category, which is forecast to see further sales declines by the end of 2017. Carbonated soft drink companies that seek to reconnect with consumers must take into account that concerns about sugar and sweeteners will continue to be a focal point for consumers moving forward.”

Over a third (35%) of metropolitan Australian consumers report checking the sugar content of CSDs, with 30% paying attention to the specific types of sugars or sweeteners used. A lack of transparency from companies regarding high sugar content is a major concern for consumers, with 64% feeling misled when this information is not readily available. The majority of Australians (76%) believe that food and beverage companies should make it easier for consumers to understand the sugar content of their products.

Shelley McMillan, Trend & Innovation Consultant, ANZ, at Mintel, emphasizes the need for clear communication from companies: “Our research points to the necessity for simple and direct communication to reassure Australian consumers who are wary of their sugar consumption. To avoid consumer confusion or concern, products could define the amount and type of sugar or sweeteners on product labelling to ensure that consumers can easily understand the sugar content of food and drink. Currently, the provision of front-of-pack sugar descriptions by carbonated soft drink companies are few and far between. This challenges more companies to be transparent in their claims.”

Interestingly, despite the demand for reduced-sugar options, industry innovation hasn’t kept pace. Data from the Mintel Global New Products Database (GNPD) reveals that only 12% of CSD product launches in Australia over the two years leading up to October 2017 featured “low/no/reduced sugar” claims. This figure falls short of the already modest global average of 15% for new CSD products introduced during the same period.

Mintel’s research further underscores the desire for manufacturers to be more proactive in reducing sugar content, with 74% of metropolitan Australian consumers believing that food and drink companies should prioritize this effort.

Zegler concludes: “Though there is a demand for reduced sugar food and drink products, companies are not doing enough when it comes to new product development. In fact, our research indicates that there is a definite opportunity for players in the carbonated soft drink industry to introduce more low, no or reduced sugar offerings into the Australian market. Another key way of enticing consumers to stay engaged with the category is for CSD brands to consider developing low, no or reduced sugar limited-edition flavour offerings.”

*1,406 internet users aged 18+ from major metropolitan cities in Australia, polled in 2017.

**November 2015 to October 2017.