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What’s Next After Sugar Tax
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What’s Next After Sugar Tax

While shoppers vow that they will not abandon consumption of their favorite taxed sugary drinks, it pays for manufacturers and retailers to listen to what shoppers need and anticipate how they will change their behavior amid price hikes brought about by excise taxes or the implementation of Tax Reform for Acceleration and Inclusion (TRAIN) law .

Nielsen syndicated qualitative study, Kamusta si Juan at Aling Nena, found that while shoppers claim continuous purchase of  these taxed drinks, they will adjust their purchase and consumption habits to be able to afford these beverages. Among the changes in their habits ranging from lessening the frequency of consumption, extending the use of products, and even taking other items off their grocery baskets.

Interviewed shoppers in the report view sugar-sweetened beverages as simple joys that they provide to their kids and themselves. For instance, some say ready to drink  juice cannot be compromised as it is part of their child’s school lunch box. Some drinks serve functional needs like boosting energy and other products are seen as a reward or personal treat. These views suggest the importance of emphasizing the emotional connection and the unique functional benefits of these beverages in the consumers’ lives.

As of February this year, prices across five categories carried by sari-sari stores increased by 20.6% compared to a year ago.  Carbonated soft drinks and energy drinks had the biggest price jumps among sari-sari stores at 21% and 18% respectively . Other sugar-sweetened beverages such as RTD juice, powdered juice and powdered tea may have not yet fully passed on the tax to consumers as prices have increased less than 10%.

In supermarkets, prices across the seven sugar-taxed categories increased by 16.6% on average.  Prices of RTD Tea and carbonated soft drinks indicated the highest price hike in supermarkets, with increases of 24% and 21.6% compared to year ago prices.

ABOUT KAMUSTA SI JUAN AT ALING NENA

Kamusta si Juan at Aling Nena is a syndicated qualitative study conducted between February  1 to 6, 2018. It includes learnings coming from 12 focus group discussions (FGD) among male and female grocery shoppers aged 21-45 years old from ABCDE homes who are decision and co-decision makers when it comes to grocery shopping, whether for self or for the household. The report also covers insights from two additional FGDs on sari-sari store owners.

For more information about the report, contact your Nielsen client service representative or send us an email.

To get a glimpse of how buying habits have changed after the implementation of excise taxes, read this related post.