"Beverage wars" used to involve taste tests - not taxes. But recently, traditional foes have turned friendly, with Pepsi, Coke, and Dr. Pepper/Snapple Group joining forces in ads that tout their voluntary departure from schools - just as the debate over a proposed tax on sugar-sweetened beverages is raging in Chicago, New York, Philadelphia and other cities.
Most opponents argue that a tax on sugar-sweetened beverages will rub salt in the wounds of families who are already feeling their pocketbooks pinched. And because there's no way to ensure that retailers will pass the tax along to consumers (and there's little preventing them from distributing the tax across all beverages versus penalizing customers who consume sugar-sweetened beverages), many argue that the tax's public health benefits are not guaranteed.
When it comes to this issue, many politicians find themselves between a rock and a hard place. Many concede that the over-consumption of sugary drinks is at least one contributing factor to many of the weight-related ills that plague today's youth. But many worry that this tax will hurt small business owners - particularly in low income neighborhoods.
Politics aside, it seems that the POV of real kids and families has been largely left on the sidelines...And while we haven't asked them directly about this issue, we do know a few facts that could provide clues to how they're feeling about this issue.
Our YouthBeat data confirms that kids, tweens and teens consume he tax-targeted beverages in significant quantities.
- When asked what beverages they drank yesterday, 23% of kids, 37% of tweens, and 39% of teens drank soft drinks; 21% of kids, 18% of tweens, and 14% of teens drank fruit drink.
- And 37% of kids, 40% of tweens and 41% of teens find out about new drinks while in store - which could mean that an increase in price (experienced most at point of purchase) could make them think twice.
We also know that many kids, tweens and teens are spending their own money, and thus, choosing their own drinks. But teens spend the most, and thus the tax could have the greatest impact on them:
- A full third of teens spent their own money on beverages in the past week. While only 22% of tweens did the same, this represents a significant increase from kids (9%).
- Almost 40% of tweens and teens (35% and 37% respectively) have shopped in convenience stores in the past month (where we know individual size beverages are frequent purchases).
- But we also know that teens are not so price sensitive, with most getting money from their parents. Will a price increase of 25 cents or even slightly more really shift their purchase patterns?
And many parents are actively trying to limit the consumption of sugary beverages among their children - and it's reasonable to think that they might look favorably on a tax that purports to help.
- 59% of parents try to limit their kids from drinking soda.
- Controlling the sugar in their children's diets is definitely on moms' and dads' minds, with 27% of parents of kids, 25% of tweens and 11% of teens say they are concerned about sugar intake or products that contain too much sugar.
- The beverages that their children ask them to buy most often would be affected by the tax, with Capri Sun, Gatorade, and Coca-Cola products topping the list.
Regardless of what happens, we expect that manufacturers will continue to push back on the tax - but push the limits of innovation at the same time. Look for more offerings and sub-category growth (among teas, for example) that appeal to kids, tweens and teens while keeping conscious of growing health concerns from parents and politicians. And parents are about to be pushed to put their money where their mouth - or their children's mouths - are!