New regulation is a tricky area for any consumer brand to deal with. For instance, this week sees Britain introduce its long-awaited “sugar tax”, a levy on any drink whose sugar content rises above a certain amount. The tabloids have found plenty of news angles – like customers stockpiling lurid Scottish favourite Irn-Bru before the formula changes. What can marketers do in this situation?
The UK is far from the only market looking into taxing food it sees as unhealthy. Millions of consumers enjoy sugary drinks and snacks, but in soft drinks at least, consumption trends are firmly in favour of lower-sugar alternatives. The tax may well come to sit alongside duties on alcohol and tobacco as something people might grumble about, but generally accept as necessary.
But even with several years to prepare, measures like the sugar tax present marketers with a dilemma. Do you change the product and provoke consumer backlash – like Kraft did when they altered the formula for Cadbury’s Creme Eggs?
Or do you raise prices, cut pack sizes, or both – measures which hardly thrill consumers either? Coca-Cola – who know a thing or two about nightmare formula changes – have taken this route, presenting it as respecting the desires of their consumer.
What is the right approach – and can behavioural science and Fluent Innovation help brands?
Last year, System1’s Orlando Wood spoke at the Sugar Reduction Summit, a conference all about sugar reduction initiatives, taxation included. He pointed out that often, the worst thing marketers can do is call attention to a product change.
Not only might trumpeting lower sugar drive off some consumers who don’t want a low-sugar option, it’s also likely to trigger the heuristic known as the licensing effect. This is where we reward ourselves for doing something good (like eating less sugar) by letting ourselves do more of something bad (like overall calorie consumption.)
Regulation means brands have no choice but to negotiate this minefield. But Fluent Innovation can make the process as painless as possible. The principle of Fluent Innovation is “80% familiar, 20% new”: successful innovation is all about making sure change doesn’t feel radical or disruptive, and framing is all important.
Let’s look again at soft drinks. According to sales data in the Financial Times, the classic, full-sugar Coca-Cola formulation has been suffering long-term decline. But Coke Zero’s rebrand as Coke Zero Sugar has shown huge UK growth. A glance at the packaging confirms that this seemingly minor change is an example of Fluent Innovation in action – the rebranded bottle moves strongly away from black to classic Coke red, reinforcing the idea that this drink really is the same as its high-sugar cousin.
Fluent Innovation works because it reassures people at the same time as it excites and tempts them. And for manufacturers at the sharp end of regulatory shifts, reassurance is exactly what’s required.