A War on Sugar? Effects of Reduced Sugar Content and Package Size in the Soda Category
79 Pages Posted: 14 Jun 2022
Date Written: June 3, 2022
Brands seeking to achieve reduced sugar content in their products generally adjust their product line to include products (i) with lower sugar content, which decreases the brand’s relative sugar content, or introduce (ii) smaller package sizes, which lowers its sugar content per package. Such sugar reduction efforts can affect consumers’ taste, health, and/or convenience perceptions, which influence products’ sales, so the current study investigates the effects of sugar reduction efforts on both volume and sugar sales in the U.S. soda category. A uniquely compiled data set, pertaining to sugar reduction efforts involving almost 140,000 product additions by nearly 80 brands over 11 years in the United States, shows that on average, sugar content (package size) reductions perform worse (better) than similar, non-reduced products. The effects also depend on product labeling, branding, and packaging decisions, and impacts on existing products vary across sugar content and package size reductions. By accounting for all these effects, the study establishes win–win conditions in which brands realize higher volume sales, and category-level sugar sales decrease. These results have important implications for how marketing can bridge brands’ sales orientations with society’s health focus—doing well and doing good simultaneously.
Keywords: retailing, sugar reduction efforts, sales decomposition, sugar content, package size, public health
JEL Classification: M31, I18, L81
Suggested Citation: Suggested Citation