Business ideas for 2017: Sugar-free drinks

As mounting research exposes the harmful effects of too much sugar on our bodies, British consumers are starting to look for sugar-free or reduced-sugar alternatives to quench their thirst.

With the ‘sugar tax’ on soft drinks due to come into effect in April 2018, purchases of leading sports and energy drinks are likely to be hit.

Research from Mintel found that 32% of Brits would cut back on the amount of sugary drinks they would consume if the price were to increase, with another 20% claiming they would stop drinking sugary drinks altogether.

Of those who would reduce their sugar intake, 37% have said they would switch to low-sugar or sugar-free energy drinks instead.

In light of these findings, 2017 represents an excellent time to enter the market with healthier alternatives to the sugar-heavy sports and energy drinks currently available on the market.

Starting a sugar-free drinks business: Why it’s a good business idea

The industry is already booming in response to the impending sugar tax with Mintel data reporting that 28% of the sports and energy drinks launched in the UK in the last year carried a no sugar or low sugar claim – an increase of 10% on 2015.

There’s a huge market to tap into though: 49% of Brits are reported to regularly consume sports or energy drinks in the UK, rising to 80% of men between the ages of 16 to 24.

Consumers are certainly ready for innovation in the market, with 28% saying they would be interested in the inclusion of cold-pressed juices, while 25% would like to see mineral water-based products and 22% said they would like fruity bits in their drinks. 29% would also like to see sports drinks made with plant-derived sweeteners.

Richard Baister, founder of high-protein water brand ProWater, said: “The soft drinks industry is changing. Year on year sales of traditional sugary, carbonated sodas are decreasing and that slack is being taken up by an exciting new range of products. People still want to enjoy great tasting drinks, but increasingly they want them without the unhealthy ingredients, especially sugar.  That is testament to the ever increasing consumer awareness of health.”

Additionally, British consumers are becoming more discerning about the origin and the ingredients in their drinks with 37% of Brits surveyed by Mintel suggesting they would like to know the origin of drinks products, while 20% would pay more for drinks with superfood ingredients.

Baister continued: “Often consumers are also looking for more than refreshment – they’re seeking healthy functional products.”

So is it time for you to launch your own sugar-free or reduced sugar drinks brand?

Sugar-free drinks business opportunities

One route to enter the sugar-free drinks market is to offer the same buzz or energy boost that consumers crave in sugary drinks in a non-sugar or reduced alternative.

You had better hurry though as many brands are already making waves in the space. One such brand is sparkling fruit infused water range Ugly Drinks, so called because it’s not “dressed up to look pretty and has nothing to hide”. The company’s simple concept was a drink that tastes great but doesn’t contain the sugars and sweeteners that cause the dreaded sugar slump.

Also operating in the market is German company Neuronade. Founded by students Chris Volke and Florian Mack, the brand was created to offer an alternative to the energy drinks students use to fuel themselves through busy periods of study. The drinks contain a range of micronutrients and natural plant extracts including ginkgo biloba and bacopo monnieri, which are said to stimulate the brain.

Likewise, Little Miracles has based its drinks brand around the special properties of Chinese ginseng and acai. Blended with organic teas and superfruit juice, the range is naturally sweetened with agave and contains fewer than 90 calories.

You might think that sugar-free drinks offer limited scope for creativity and invention, but Baister, the man behind calorie burning SUMO Drinks and brain health drink brand Brainwave would beg to differ.

His latest beverage brand is high-protein water ProWater – a range of flavoured water containing 20g of protein and just 90 calories per bottle. Baister is aiming to offer an alternative to the various shakes and protein bars on offer that tend to contain far more sugar than gym-goers expect.

Baister explained: “We are offering the protein so many consumers want and need, but without sugar, carbs or fat and with just 90 calories.  It’s just so much cleaner than protein bars or shakes.”

Consumers are also looking for healthier options for their children. Where, in the past, major soft drinks companies have sought to appeal to children with vivid branding – such as the beloved Coca Cola Christmas advert – low sugar contenders are launching in the space to give kids a health kick.

With childhood obesity rising, this represents a high potential and very important market.

Startups 100-featured Rebel Kitchen jumped on the coconut trend a few year’s ago with a range of coconut-based drinks for kids and adults, sweetened with date nectar. The start-up secured listings in Waitrose, Tesco, Wholefoods and Ocado within its first year of trading.

NB: If you are making big health claims for your beverage brand, make sure you have scientific research or evidence to back them up as you’ll need to gain and maintain the trust of discerning customers.

Insider opinion

Commenting on why he started a business in the market, Ugly Drinks co-founder Hugh Thomas said:

“We began to think more and more about the impact of sugars and sweeteners in soft drinks on the British diet.

“We noticed the impact on diabetes, obesity and general happiness and decided it was time to create a genuinely tasty, affordable and accessible carbonated drink without any of the sugars and sweeteners that we felt cause many of these issues.

“Ugly doesn’t promise to make you happier, healthier, faster or stronger, but we are beautiful on the inside with no sugar, no sweeteners, no calories and no artificial ingredients.”

Published Jan 2017