PRICE: A PAYING ARGUMENT

SUGAR-SWEETENED BEVERAGE MARKETING UNVEILED

VOLUME 1 VOLUME 2 VOLUME 3 VOLUME 4

SUMMARY

• By promoting competitive and attractive prices, the sugar‐sweetened beverages (SSB) industry tries to make its products affordable for as many consumers as possible.

• Price is a determining factor in young people’s eating habits.1,2,3

• 65% to 80% of buying decisions are made at the point of sale.4 A low price can encourage an impulse buy.• Increasing the price of SSBs by 10% could reduce their consumption by 8 to 10%.5

1 > One Category, One PriceDifferences in pricing among the various types of sugar‐ sweetened beverages influence consumer perception of the products.

SOFT DRINKS: LOW PRICES

• Generally less expensive than other SSBs, they are very affordable for consumers of all ages and in all financial circumstances.

“ADDED VALUE” DRINKS: HIGHER PRICES

• Adding vitamins, minerals and other substances said to be “natural” is a tactic for justifying higher prices.

• Prices do not so much reflect the composition of the product as the symbolic aura that the industry wants to create around them.

2 > Omnipresent Discounts THERE ARE ALWAYS PROMOTIONS, REGARDLESS OF THE BEVERAGE

• Despite their already relatively low prices, soft drinks are very regularly on special offer.

• Promotions on “added value” drinks encourage people to try these products, especially consumers on tight budgets.

• The frequency of such special offers builds consumer loyalty.

ANY OCCASION IS A GOOD ONE

• Sports events (e.g. Super Bowl)

• Brand anniversary (e.g. Coca‐Cola’s 125th)

• Holidays

PROMOTIONS ADVANTAGEOUS FOR THE INDUSTRY

• Special offers increase sales volumes.

• SSBs are used as bait to get consumers into stores.

• The frequency and extent of special offers ensures the brand’s ongoing visibility in retailers’ flyers.

In contrast to many other foods, the cost of which is conti‐nuously rising, SSBs have experienced very meagre price in‐creases over the years, which increases their relative afforda‐bility.

PRICE INFLUENCES FOOD CHOICES

FOUR MARKETING STRATEGIES

Price variation of items ($ CAN) since 1995 relative to overall inflation in Canada

$6.8 /litre6$2/litre

Soft drinks Energy drinks

A Tax on SSBs: a Promising MeasureTaxation has been identified as one of the most promising and cost‐effective strategy for governments by many recognized organizations and agencies9, such as:• The Institute of Medicine of the National Academies10

• The Organization for Economic Cooperation and Develop‐ment (OECD)11

• The United Nations12 • The Yale Rudd Center for Food Policy and Obesity13

Many countries are considering or have already implemented this approach: • Hungary• France• Algeria• Scotland• Ireland • many US states14

For example, a 1‐cent tax on every litre of SSB would generate an estimated $36 million in tax revenues across Canada.

DISCOVER WHAT LIES BEHIND THE MARKETING OF SUGAR-SWEETENED BEVERAGES!

See the full report in the “Sugar-Sweetened Beverages/Marketing” section at www.cqpp.qc.ca.

Learn how to identify price-based marketing strategies and what can be done to curb the attractiveness of sugar-sweetened beverages.

3 > Buy more, save more• Large formats are generally cheaper

per volume than small formats. • Many promotions encourage you

to buy more than one (4 for $7, for example).

4 > Fast food + SSBs = double trouble• Low prices, even free offers of SSBs, are regularly highlighted

in fast food establishments.• SSBs become bait or rewards.

The True Cost of Sugar-Sweetened BeveragesAlthough their shelf prices are very low, SSBs may have a signficiant economic impact on health costs with repercussions affecting all of Canadian society.

IN THE UNITED STATES:• Over a 10‐year period, US$82 billion in medical costs are

attributable to the excessive consumption of SSBs.7

IN CANADA :• The relationship between SSBs and obesity has been clearly

documented, and their consumption is also associated with other diseases such as type 2 diabetes, cardiovascular disease, metabolic syndrome, high blood pressure, and bone and dental health problems.

• Obesity could cost up to $30 billion a year.8

Canada’s federal, provincial and territorial governments should therefore rely on the many studies, international feedback, as well as substantial popular support to impose a tax on SSBs to be paid by their manufacturers. The revenue generated by this tax should be invested in prevention and in promoting healthy lifestyles.

RECOMMENDATION

PRICE: A PAYING ARGUMENT

SUGAR-SWEETENED BEVERAGE MARKETING UNVEILED

VOLUME 1 VOLUME 2 VOLUME 3 VOLUME 4

The report “Sugar-Sweetened Beverage Marketing Unveiled” is a central component of the project entitled “A Multidimensional Approach to Reducing the Appeal of Sugar-Sweetened Beverages” launched by the Association pour la santé publique du Québec and the Quebec Coalition on Weight-Related Problems as part of the 2010 Innovation Strategy of the Public Health Agency of Canada.

1. Taylor J.P., Evers S, McKenna M. (2005). Les déterminants de la saine alimentation chez les enfants et les jeunes. Revue canadienne de santé publique, 96(Supplément 3), S23‐S29.

2. Shepherd J., Harden, A., Rees, R., Brunton, G., Garcia, S., Oliver, S. & Oakley, A. (2006). Young people and healthy eating: a systematic review of research on barriers and facilitators. Health Education Research, 21(2), 239–257.

3. Committee on Food Marketing and the Diets of Children and Youth (2006). Food Marketing to Children and Youth: Threat or Opportunity? Washington D.C.: The National Academies Press.

4. LaSalle M. (2011). À l’épicerie : quelques trucs pour éviter les pièges du marketing alimentaire. PasseportSanté.net, 26 avril 2011. Consulted on October 14, 2011 at http://www.passeportsante.net/fr/Actualites/Nouvelles/Fiche.aspx?doc=epicerie‐trucs‐pour‐eviter‐pieges‐marketing‐alimentaire_20110421

5. Andreyeva, T., Long, M. W., & Brownell, K.D. (2010). The impact of food prices on consumption: A systematic review of research on price elasticity of de‐mand for food. American Journal of Public Health, 100(2), 216‐222. Consulted on November 14, 2011 at http://www.yaleruddcenter.org/resources/upload/docs/what/economics/FoodPricesElasticity_AJPH_2.10.pdf

6. Price spotted on March 15, 2012 at http://magasin.iga.net/Parcourir/Boissons.aspx

7. Wang Y.C., Coxson P., Shen Y.M., Goldman L., Bibbins‐Domingo K. (2012). A Penny‐per‐ounce tax on sugar‐sweetened beverages would cut health and cost burdens of diabetes. Heatlh Affairs. Consulted on March 6, 2012 at http://content.healthaffairs.org/content/31/1/199.full.pdf+html

8. Behan DF & Cox SH (2010). Obesity and its Relation to Mortality and Morbidity Costs. Society of Actuaries. Consulted on August 5, 2011 at www.soa.org/files/pdf/research‐2011‐obesity‐relation‐mortality.pdf

9. Yale Rudd Center for Food Policy and Obesity (2011). Sugar-Sweetened Beverage Taxes and Sugar Intake: Policy Statements, Endorsements, and Recomman-dations. Consulted on November 14, 2011 at http://www.yaleruddcenter.org/resources/upload/docs/what/policy/SSBtaxes/SSBTaxStatements.pdf

10. Parker L., Burns A.C. & Sanchez E., Editors; Committee on Childhood Obesity Prevention Actions for Local Governments; Institute of Medicine; Natio‐nal Research Council (2009). Local Government Actions to Prevent Childhood Obesity. Consulted on November 3, 2011 at http://www.nap.edu/catalog.php?record_id=12674

11. Organisation for Economic Cooperation and Development (2010). Obesity and the Economics of Prevention. Consulted on July 13, 2011 at http://www.oecd.org/document/59/0,3746,fr_2649_33929_46054203_1_1_1_1,00.html

12. United Nations. (2011). Report submitted by the Special Rapporteur on the right to food, Olivier De Schutter. Consulted on March 6, 2012 at http://www.srfood.org/images/stories/pdf/officialreports/20120306_nutrition_en.pdf

13. Yale Rudd Center for Food Policy and Obesity (2011). Sugar-Sweetened Beverage Taxes. Consulted on November 14, 2011 at http://www.yaleruddcenter.org/what_we_do.aspx?id=271

14. Pomeranz J. (2011). Advanced policy options to regulate sugar‐sweetened beverages to support public health. Journal of public health policy. 2012(33), 75‐88. Consulted on November 16, 2011 at http://www.palgrave‐journals.com/jphp/journal/v33/n1/full/jphp201146a.html

BIBLIOGRAPHY

Phone: 514 598‐8058Fax: 514 528‐5590Email: info@cqpp.qc.ca Web Site: www.cqpp.qc.ca

Address:4126, St‐Denis Street, suite 200Montréal (Québec)H2W 2M5

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This project is based on a major pan‐Canadian partnership involving:• the Réseau du sport étudiant du Québec• the Fédération du sport francophone de l’Alberta• the Social Research and Demonstration Corporation • the Université Laval• the Public Health Association of British Colombia • the Ontario Public Health Association

This summary has been made possible by a financial contribution from the Public Health Agency of Canada. The opinions expressed here do not neces‐sarily reflect the official position of the Public Health Agency of Canada.