The evolution of Coca-Cola Australia’s soft drink reformulation strategy 2003–2017: A thematic analysis of corporate documents

Highlights

• Coca-Cola’s strategy shifted from “offering choice” to “systematic” reformulation.

• Product reformulation is a business strategy repackaged as health promotion.

• Consumer rejection of artificial sweeteners complicates soft drink reformulation.

Abstract

Governments around the world are pressuring the soft drink industry to reformulate sugary drinks, in particular through taxes on sugar content or front-of-pack labels identifying products high in sugar. Even in countries with no sugary drink tax, such as Australia, the soft drink industry has a reformulation policy. While reformulation is often framed as a “win-win” solution for business and public health, many public health experts consider it to be a political strategy to improve corporate reputations and minimise the threat of regulation. We use a case study of Australia’s largest soft drink company, Coca-Cola Australia, to examine the evolution of corporate reformulation policies. We analysed a dataset of 144 corporate documents published between 2003 and 2017 to analyse how Coca-Cola’s policies changed and how it described and justified its reformulation initiatives. Between 2003 and 2017, Coca-Cola Australia shifted its reformulation strategy from “offering choice” to “systematic” sugar reformulation. It also presented two predominant rationales for reformulation: that it would grow its business and that it was “part of the solution” to obesity. We discuss these findings in relation to market and regulatory challenges facing the soft drink industry globally, including the spread of sugary drink taxes as well as consumer rejection of artificial sweeteners. This paper examines how a regional branch of the world’s largest soft drink company is adapting to pressures to reduce the sugar in its products as well as the tensions and barriers it faces in negotiating different consumer and public health interpretations of healthy beverages.

Introduction

Two weeks before the UK soft drink levy came into effect in 2018, the treasury announced that it expected to only collect half of the originally projected tax revenue (Dewey, 2018). In the time between the announcement of the tax and its implementation, UK soft drink companies had dramatically reduced the sugar content of their beverages to escape the tax. By some measures, this was a successful policy outcome. The aim of taxes on sugar content or front-of-pack labels identifying products high in sugar is to systematically reduce global sugar consumption—often by pressuring the soft drink industry to reformulate sugary drinks (Hawley et al., 2013, Vyth et al., 2010, Corvalán et al., 2013, Smith et al., 2018, Borges et al., 2017, World Cancer Research Fund, 2015). On the other hand, product reformulation is a business strategy, one the soft drink industry has used since its inception to reduce ingredient costs or appeal to new markets (De la Peña, 2010). We argue that the soft drink industry is strategically appropriating the public health objective to reduce sugar consumption and reframing it as part of its corporate social responsibility (CSR) agenda, and that this CSR strategy offers both commercial and political benefits for the industry.

While many public health organisations support product reformulation in principle, significant gaps exist in public health experts’ expectations for product reformulation and the way in which the food industry has (re)interpreted the mandate for reformulation to suit its business interests. Critics of corporate reformulation note that: food companies rarely reformulate existing products, but instead develop new, reformulated alternatives that rely on consumers exercising personal responsibility to purchase them (Scrinis, 2016, Nestle, 2013, Panjwani and Caraher, 2014); food companies selectively reformulate some but not all of their products (Scrinis, 2016); and food companies make insignificant reductions of the “negative” ingredient or replace it with a new ingredient that may be just as problematic or worse than the original (such as the replacement of saturated fats with trans fats) (Scrinis and Monteiro, 2018, Monteiro and Cannon, 2012). Some scholars go further and argue that voluntary product reformulation is a political strategy designed to: improve corporate public images; foster partnerships with government and public health stakeholders; and minimise the threat of mandatory regulation (Scrinis and Monteiro, 2018, Clapp and Scrinis, 2017, Scrinis, 2016, Scott et al., 2016).

This study examines how the soft drink industry’s reformulation strategies have evolved and changed since they were first positioned as “part of the solution” to obesity. In this paper, we use a case study of Coca-Cola Australia to interrogate how the company has committed to reduce the sugar in its products and how it has communicated the benefits of this strategy. When did reformulation become part of Coca-Cola’s response to obesity in Australia? How has Coca-Cola Australia’s communication and practice of reformulation changed? What challenges constrain reformulation, and how has the soft drink industry endeavoured to negotiate them? This paper aims to provide insights into the evolution of Coca-Cola Australia’s voluntary product reformulation initiatives and the different rationales presented by the company to justify these changes to its portfolio.