THE decision by AG Barr to change the recipe of Irn-Bru may have divided opinion, but it shows the company is not afraid of making tough decisions it believes to be in the interests of its customers.
As Coca-Cola confirmed plans to reduce pack sizes and increase prices ahead of the sugar tax being introduced in April, AG Barr has gone the other way. And the bold move to halve the sugar content of Irn-Bru comes as the vast majority of consumers were found to have backed measures to make their favourite products better for them.
So while the reduction means Irn-Bru will not be impacted by the UK’s officially labelled Soft Drinks Industry Levy, which applies a tax on drinks with high sugar content, and the move has been timed to avoid such an eventuality, it is clear this is a change the public wants to see.
Speaking to The Herald yesterday, chief
executive Roger White said he was “very pleased” with initial feedback on the new recipe.
“Times of change are hard but what drives our business is consumers, not regulators,” he said.
In March 2017, one year after then Chancellor George Osborne announced a sugar tax, AG Barr dropped the bombshell that the sugar content of Irn-Bru was to be cut from 10.3 grammes of sugar to 4.7 grammes, through the introduction of low-calorie sweeteners, including aspartame.
After almost a year, and a cost described by Mr White as “a big part of our programme this year”, the new recipe has hit shops.
“We’ve been developing our business and our portfolio for years, whether that’s through acquisition, innovation or indeed reformulation, and that is what we’re doing now because evidence shows most consumers want to reduce their sugar intake while they still enjoy, in our case, great-tasting drinks,” he said.
That finding was confirmed last week, when the latest Scottish Social Attitudes survey found 62 per cent of Scots back the sugar tax and 82 per cent of people support measures to make the food they like better for them. And that needs to happen. The proportion of Scottish adults classed as overweight is now 65 per cent – up from 52 per cent in 1995. Three in every 10 are obese.
Of course we should have freedom of choice, but pressure on the NHS is unprecedented. More people are at risk of serious health conditions, from heart disease to type 2 diabetes. The sugar tax is aimed at helping reduce this. So, from April, drinks with more than five grammes of sugar per 100 millilitres will be levied 18p per litre, rising to 24p for drinks with more than eight grammes per 100ml.
The new Irn-Bru may more than halve the sugar content but there remains more than four teaspoonfuls of sugar in a standard 330ml can. More sugar than almost everyone has in their tea or coffee.
While the company says nine out of 10 people in taste tests found the taste match was good or excellent, not everyone has approved. The inevitable Twitter storm revealed dramatic claims of lofts being stockpiled with “original” product, and then came the online petition – which currently has more than 48,000 signatories demanding the company takes its “hands off” Irn-Bru.
“When you’ve got a brand as iconic and important as Irn-Bru you accept that people are going to feel strongly about it,” said Mr White. “We’ve been up front, we’ve been honest. And importantly, I’m really proud of the product we’ve put out.”
The unease is understandable. Scots have an almost parental pride in Irn-Bru – this is ours, we made this, and hasn’t it done well.
And, since 1901, it has done very well. It is our “other national drink”, its recipe shrouded in secrecy, known by only three people. Barr’s market value is £750 million. It is Ginger. Bosses at the company know how much it means to people, so while Barr’s focus – as it must be – is on driving value for shareholders, there is also an obligation to the millions who enjoy Irn-Bru.
“We would see the consumer decision as first by a long way,” said Mr White. “The change in the regulatory environment, it’s hard to tell until we get there what’s going to happen, but we believe from a consumer point of view, and indeed from a consequential business point of view, we are doing the right thing. Our consumers are not going to be penalised by paying incremental costs.”
With Coca-Cola opting to not change its recipe, the levy will be applied to Irn-Bru’s main competitor. To combat the tax Coca-Cola has confirmed it is reducing bottles sizes and raising prices.
That makes Irn-Bru more price competitive – making the change not just a good decision for customers, but for the business and its investors. Ultimately the customers will decide if the new product has done enough to maintain Irn-Bru’s market position. But if our largest manufacturer of soft drinks can deliver a product which most of its customers want and are happy with, then it should be applauded.
“While you don’t expect to convince everyone immediately of the rights and wrongs of what
you are doing, we do want people to positively embrace it.
“We are trying to give people what they want, which is improved diets. It is still a sugary drink, there is still choice in the range between variants, but we are very pleased with the response we have had from consumers,” said Mr White.
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