A small producer's open reply to the Sugar Tax - Budget 2016 Response

As a small producer, and working with many other start-ups and other small producers, we have perhaps a unique position from which to view the proposed sugar tax, due to take effect from 2018.

Why unique?  Because we're not 'corporate', everything is viewed from a more personal level, but more importantly because we will likely be exempt from the proposed sugar tax under the small producer exemption (although details on this are currently hard to find).  As we are a family run business then we have no shareholders to answer to and our thoughts can be forthright.

Let me tell you how we approach soft-drinks in our household (2 adults, 2 children - 2 & 7): They are for occasional treats, not daily consumption.  Soft drinks, and be that fizzy pop, or pure fruit juices, are generally either by nature or design, highly acidic (that's part of how they're preserved), and that's not good for the teeth.  Nor is letting our children believe that either sugary drinks, or drinks that taste like they're sugary (children don't know the difference), should be a part of a daily healthy diet.  This is also part of what we teach children when we do tours, demos, or school visits.

As a producer, and a consumer, we do not have any real problem with government intervention in this area (that's not to say that we're 'pro' sugar tax either).  Encouraging consumers to be more mindful of their consumption in this day and age is difficult, but everyone notices the pennies in their pocket - from the affluent to the less so.

Why do we not have a problem with government intervention in this area?  It's not because we're believers in 'big government', but because the general public (which includes me and all those working with me), are hard to reach via education programmes.  Soft drinks are mostly empty calories.  There's no nutritional value to the extra calories in there, but sugar is a simple way of making soft drinks 'work' without adding extra agents like gummes, thickeners and the like - aka 'chemicals' in the public mind - which are off-putting to the consumer and can be expensive in their own right, as well as expensive to formulate or process.  But there are already alternatives.  For the vast majority of 'main brand' soft drinks you can already find a diet or low-cal alternative.  This raises two questions:  why do people drink the 'full fat' version, and should we be forcing them to do so?

Let's be frank here - if you want to have what is termed a 'clean label' product in the soft-drinks world then you'll be hard pressed to do it without sugar (at least without confusing the situation more).  Consumers are pressing more and more for 'all-natural' products.  Now, as an industry-insider, I can tell you that the line between 'natural' and 'non-natural' is about as fine as the difference between a politicians publicly stated-truth, and the publicly perceived 'real' answer:  they contain truth, but it's really all about the language rather than the substance.  Thus the consumer is going to have to accept alternatives that are either lacking, accept the price increase, or accept 'chemicals' in their products.  Which they have for years anyway, albeit under the 'natural' nomenclature.  Thus, many people drink 'full fat' versions of drinks to avoid the 'chemical' or 'non-natural' alternatives to sugar.  Should we be forcing them to drink 'non-natural' products?  Well, that's a good question, and it depends on the definition of 'natural', but that moot point aside no-one would be forcing them to do so - but they will be taxed for the privilege of opting for a more 'natural' product.  

Will it work?

There have been studies, notably by Professor Ivan de Araujo of Yale University School of Medicine that state that by switching to a zero sugar product your brain will still crave the sugar as although your taste-buds perceive sweetness your body does not receive the calories:

The results of the new study imply that it is hard to fool the brain by providing it with ‘energyless’ sweet flavours. Our pleasure in consuming sweet solutions is driven to a great extent by the amount of energy it provides: greater reward in the brain is attributed to sugars compared to artificial sweeteners.
Professor Ivan de Araujo, who led the study at Yale University School of Medicine USA, says:
“The consumption of high-calorie beverages is a major contributor to weight gain and obesity, even after the introduction of artificial sweeteners to the market. We believe that the discovery is important because it shows how physiological states may impact on our choices between sugars and sweeteners. Source

So, opinion may be divided insomuch as removing calories in one place may cause the craving to be displaced somewhere else.

Effect on low income households

There's a discussion to be had on the effects on household budgets. The Tax Payer's Alliance (TPA) have stated:

Sugar Tax is a deeply regressive consumption tax, which will hit those on lower incomes the hardest. Dia Chakravarty - Tax Payer's Alliance Political Director - Source

Do I believe this?  No.  That's an either-or fallacy - or a 'false choice dilemma'. People are not forced to buy sugary drinks - it's a decision, and the brands that lower-income families purchase would tend to be big-brand, low(er) priced, or supermarket own brands.  These are almost always available with Diet alternatives.  This kind of argument really fouls the water, and is, in my opinion, a bit of a cheap-shot without substance.

As a producer, here is what I have noticed through experience:
What people say, and what they do are often very dissimilar.  People will rather trade truth for a comforting lie and self-imposed ignorance.  You could take 'vitamin waters' as an example; people know that they really don't need all that extra in their drink, but it makes the purchase more comforting and can be justified as 'being good', even if the product might otherwise be called 'bad'.  People will decry sugar, and yet often purchase the worst sugary offenders without pricking their conscience.  Righteous anger in the abstract, hypocrisy in daily life.  It's very easy to blame an anonymous industry or figure for a lack of self-control or care.  I include myself in this.  So taxing people to make them sit up and listen is a simple way of forcing them to notice what they're paying for and consuming.

If, and that's a big if, sugary soft drinks really are a leading cause of obesity, type II diabetes and the like, then the truth is, that like alcohol & tobacco, those products that cause conditions that the public should run from, and that tax-payers are paying for in NHS bills, should be taxed.  But we're in another area of false-equivalence.  Alcohol & tobacco are not the same as sugar.  There are very real cause-and-affect relationships between the two and their associated medical conditions, and the bill that the tax-payers have to pick up for NHS costs.  Sugar is seemingly in everything.  Your fat-free healthy yoghurt?  Packed with sugar to make up for the fat.  Sauces, ready-meals, in fact it's difficult to think of a processed food that doesn't contain sugar.  You know what you're buying when you purchase alcohol or tobacco, that's not the case with sugar.

Can this be misleading?

30g of sugar a day is what the NHS states as your maximum 'added' sugar intake (5% of total calories) - Source.  A mini-mars bar (you know, the ones you can eat 4 of without noticing) contains 11.5g of sugar - a mini Milky Way has 10g.  A Yazoo 400ml chocolate milkshake contains 37.6g of sugar.  Milkshakes and confectionery are exempt from the sugar tax.  Oh, and the shake is 2.5 servings according to the label.  That means that you're expected to share it with 2.5 friends, or drink it over 2.5 days.  No-one does that - but maybe 'portion size' which is often used as a calorie/sugar counter should be left for a separate discussion.

If we solely tax soft drinks then there's an argument to be made that people will believe that it is soft drinks that are causing them the majority of weight issues.  "If this were not the case", the public could think, "then why would only they be singled out"?  This is really rather a dangerous case of the law of unintended consequences.

So, while I don't have a problem with a sugar-tax per-se, I do believe that it should be applied to other non-nutritional products, or treats, like confectionery, like milkshakes.  Other than political pressure, and the thought of having every choc-a-holic crying foul at the government there is no reason in principle not to.  

Will it cause the industry problems

So, in short, will this cause problems for the industry.  Yes and no.  The big-boys have the ability to reformulate, or to charge more and their customers will inevitably pay, and it'll almost certainly be used as an excuse for a price-hike which won't be solely due to the tax.  There will be some losers - sales will go down.  In the big-boys league they'll simply migrate to Diet/Zero/Sugar Free versions, no big losses.  Will that stop a lot of arguing and bluster?  No, if for no other reason than to set their stall out against further intervention in other areas.  For smaller producers it may cause issues, although we're yet to see what level the exemption kicks in.  For the smallest producers, then they are exempt.  That may actually be good news for people like us.  However, everyone is likely to find that this tax will be costing them something, large or small, in PR, good-will, governance costs, admin, formulations and the like.

The take-home

 If cutting obesity/diabetes is the goal then this should only be the start.  If we don't see this rolled out to other products in the next 5-7 years or so then it will show that there are other reasons behind this tax, or that there is not enough political backbone in our governments to follow through on what they believe.

Are we pro, or anti sugar tax?  Well, neither.  There are valid points to both sides.  We're in the camp of 'be careful what you wish for, you might just get it'.

We would really encourage everyone to be more aware of what they consume, and where they place value.  We've produced amazing all-natural products with fresh, natural ingredients with provenance, and they've flopped.  Whereas the otherwise identical product (but cheaper), made with 'flavours' have sold by the bucket-load.  If you want better products then show producers that there is a market for it.  Their job is to sell to you what you will buy.

 

 

 

Soda Starter - At home drink making

For a while now we've been trying to think of a way that would allow those with a creative bent to put a toe in the water of playing around with flavours, and we think we have a solution, but really would love to hear your feedback!

The kit would comprise of a number of bottles (your choice), which would be a 'ready-to-go' base for you to add your flavourings to.  These would be pre-sweetened, pre-preserved and pre-acidifed.

The kit would be in two form types:

  1. Suitable for use of flavourings and colours
  2. Suitable for the addition of up to 10% fruit juice

Each pack would include the bottles of base mix (still or sparkling), a measuring cylinder (for fruit juice), syringe for measurement of flavours, and a selection of flavours to 'get you started'.  Additional bottles and flavours can be purchased outside of the kit.  And of course a full set of instructions.

We'd love to hear your thoughts, and what you'd like to see included!

 

9 ways to lose friends and influence people as an entrepreneur, or starting a new business

9. Everything on my timetable
When working with suppliers you have to plan around their lead times, and your 'place in the queue'.  That's not to say that sometimes customers and suppliers can't be too slow sometimes, but while what you are looking for from them looms large in your mind, you are likely one of many priorities for them.  Pushing your timetable, especially when something could/should have been done earlier, but was left 'til the last minute by you (expecting others to accommodate you), is more likely to get you the cold shoulder.  

8. Expect others to own your problems
There's one major rule that will endear you to people:  OWN IT!  As the owner of your business then it's up to you to make the decisions, and to follow through with action points whenever a problem arises.  Your customers and suppliers should not have to bear the burden on your behalf.


7.Don't listen to advice
If you know best, why are you asking others?  There can be nothing more frustrating than someone asking your thoughts, be it professionally or otherwise, and instead of taking it under consideration, the speedy response is 'no' or an approximation of it.  We're not suggesting you have to *take* every piece of advice, but have the good courtesy to listen to it, and hold back on your rejection for a respectful period of time that would indicate that you have given it due consideration

6. Assume you're right unless proven otherwise
This comes down to a little humility and grace.  You may be sure that you're right, but weather it be customer or supplier the implication of 'prove it' is offensive.  There are times when you may need to do this, occasionally, but there's a right way of asking someone to verify that they're right.  If you're starting a business and you think that you're the most 'right' or intelligent person in each room that you're in, in varying aspects of your business, or *any* single aspect, the you're in the wrong room

5. Entitlement
Let's get this very clear, one of the fastest way to alienate people, be it suppliers or customer, is to give the impression that you are entitled to give them a sales pitch, or to take their time, or that you have the right to their services, discounts, or to make demands that quite simply you don't have the right to ask.

4. Favours
OK, so there are many people, that following on from the previous item, feel that they are entitled to ask for favours - and that's wrong.  But more than that, no matter weather you ask with or without that sense of entitlement, you're asking people to not only put themselves out professionally or personally, but also make themselves 'look like the bad guy' when they can't, or shouldn't, complete that favour.  In addition, running your business on favours gives you an incorrect belief of what it takes you to make your business work, as you're not paying in time or cash for the things that are required to make your business work.  Be careful with favours - they are a very limited resource.

3. Chase
OK, so sometimes we can all need a kick up the bottom every so often, but l when it comes to chasing for information, quotes, sales pitch follow ups etc., then be careful how often and regularly you chase.  Being 'that guy' will end up with people wanting to not return your call or do more business with you .  Don't be that guy.

2. Don't be accurate (info etc.)
Be it as a supplier or a customer either getting the wrong information, or incomplete information when asked is a sure fire way of determining that the person that you're dealing with is either unprofessional,  isn't paying attention to you and your needs (not a good sign), or just doesn't know what they're talking about.  These are bad things, no matter which way you cut it.  Making someone ask you again makes them feel bad for making you look ignorant, stupid or unprofessional, so as often as not they won't , and then they'll avoid the issue, or you.

1. Be unrealistic
OK, so this is the number one on the list because it says so much about you.  People will absolutely not want to work with anyone that quite simply has no idea about what they're asking for.  People will have no respect for your business, because they will likely see it as not being a business, merely a pipe dream that you're asking them to buy in to.  Make it real, make it believable, make it work.

Change is coming: Food & Drink Labelling Regulations - Your Product Must Be Compliant by Dec 2014!

In Dec 2014, and again in Dec 2016 the regulations regarding food labelling will be changing.  For the 2014 changes, then there isn’t really a great deal of changes to be made.  In 2016 the law will make it mandatory to have nutritional information on the label of your food and drink products.  This may well put new producers off of entering the market as there will likely be a fair few £ being required to be spent on this.

The Dec 2014 changes are far simpler.  Simply put they require that any of the 14 allergens identified & listed in the EU FIR 1169/2011 document to be highlighted in the list of ingredients, and not as previously allowed in a separate allergens advice statement such as “contains milk & nuts”.  The one exception to this rule is for alcoholic products where ingredients are not required, in which case a statement such as “contains sulphites” is acceptable.

The list consists of cereals containing gluten, crustaceans, molluscs, eggs, fish, peanuts, nuts, soybeans, milk, celery, mustard, sesame, lupin and sulphur dioxide at levels above 10mg/kg, or 10 mg/litre, expressed as SO2.

From the Food & Drink Federation’s Labelling Toolkit:

“Fourteen major food allergens must be emphasised in the ingredients list.  These are: cereals containing gluten, crustaceans (e.g. prawns  or crab), molluscs (e.g. clams or mussels), eggs, fish, peanuts,  nuts, soybeans, milk, celery, mustard, sesame, lupin and sulphur dioxide. Where the allergen is not obvious from the name of the ingredient, there will be a clear reference to the name of the allergen next to the ingredient e.g. ‘casein’ (milk) or ‘tofu’ (soya).  Food businesses can choose the method of emphasis that they would like to use, for example, bold, italics, highlighting, contrasting colours, CAPITALISING TEXT and underlining.  An allergy advice statement may also be used to direct consumers to the ingredients list for allergen information. 

No more references to gluten!  Consumers will instead need to look for the cereals containing gluten, such as wheat, rye and barley, which will be emphasised in the ingredients list.”

Small Scale Bottle Filler

It may not be much, but every little victory is a step forward.  Our PCBs (Printed Circuit Boards) have been made and are with our manufacturing consultant, and we'll have one in our hands in the next few days, God willing.  

From here we need to test to make sure that the pump we've initially specified for the proof of concept, as well as the coding that has been implemented to control it all, are up to the job we need them to do.  Not just 'do they work', but do they work in the manner that we would like them to with a user friendly experience.

There will inevitably be a few speed-humps to overcome, but progress is progress and we don't take it for granted.

Please use the 'comments' link below to make your thoughts known, and to let us know if perhaps you're interested in the machine when its done, or what you'd like to see in this - or perhaps for MKII!

Jonathan

P.S. Here's a little pic to whet your appetite

Preservation Techniques & Bottle Choices

Did you know that the choice of bottle has a huge impact on what preservation methods can be used?  We get a lot of questions about it, so we've now made a cheat-sheet  to download (just click HERE to download it), that gives an overview of what, why and how.  We hope you find it useful!

We've also published a 'Bottling For Dummies' guide - click HERE for that one - a 'must read' to all those thinking about contract bottling - it'll save a lot of headaches later on!

Lastly, some people get confuzzled over what a bottler's job is, so there's more information on that HERE.

We'd really appreciate your feedback, either by clicking the 'comment' link below, or by dropping us a line through our contact page.

Building our own Hardware - interested?

Those of you that have researched the wonderful world of bottling in a effort to start your own line will know that kit isn't cheap.  We were told that unless we have 150k (£) - about 300,000USD, then don't even bother.  We of course ignored that advice and managed to do it on a lot less.

Nevertheless the problem still exists.  Doing it yourself is fine, but you still need large amounts of money as you grow to expand.  

We're something of the tinkering kind here at the Fizz Factory.  We built our own Pasteuriser, and now we build them for sale.  25% bigger and 33% cheaper than the competitions in-bottle pasteurisers, and a darn sight more insulated and stronger too.

Now we're working on the next step.  How long it will take we don't know, so don't expect something this month, or even the next 3-6 months, but it's coming.

We want to build a scaleable, semi-automated bottling system that we can supply either as fully built, as a kit, or simply a schematic that you can source your own parts for.  

It uses micro-processors to control the fill levels, so no having to worry about staff making mistakes.  It would also allow for expansion with conveyor belt feeding and the like.

The idea is that it uses cheap, inexpensive parts that can be purchased from many places.  It won't be designed to last 10 years, but it will be designed to be fixed for £20 or so, irrespective of what part goes wrong.

If you would like a single filling head as a home-brewer and would like to build it yourself then you would be able to.  Alternatively if you expand to become a micro-brewery and need to have 10 filling heads operating simultaneously then you simply buy 9 more filling heads and they would work.  Simples.

We'd just love to know if people are interested, so please let us know. 

Ring Pull Crown Caps - UK Exclusive Bottler

Well we've gone and done it!

We've taken the first step on breaking new ground in the UK.  Ring pull crown caps were tried here in the UK once, about 25 years ago, but the bottler didn't stick with it.  It was a big multi-national and they used it as a novelty then discarded it.

We think there's more to it than that.

Simplicity is king.  Keep It Simple, Stupid. This KISS principle means we should take a good long look at ring pull crown caps.  They are suitable for both the take-away, drink at home and retail environments.  They're cheaper than screw-caps and they look very sleek.  The bottles for crown caps are cheaper than screw-caps, and the crowns themselves are also less expensive than many screw-cap styles that we have to use.

What's not to like?

So, we're importing the kit and caps to do it.  It's not cheap, but we think it's worth it.

Out of the ordinary

While we started off making 'simple' lemonades and such, then progressing on to cordials and the like for our own ranges, it seems that we've outfitted ourselves with a larger range of skills than we had originally thought.

We've been producing 'functional' drinks like Mineral/Vitamin drinks, playing with smoothies for customers and NPD (new product development) for a range of syrups for use with one of our customer's products.

Every day proves to be more interesting than the next.

Not only are we up to the challenge, we're making it successful! 

Things are changing apace

In the past few weeks we've had a lot of things changing and a lot of interest from new customers.

To help cope with the demand we are currently looking at installing a complete line capable of bottling 40-60 bottles per minute ( up to 3,500 per hour), with the ability to increase to 7,000 bottles per hour with a change of capping head.  The line will close using ROPP (Roll On Pilfer Proof) caps, with the option of plastic screw caps to those who need it.  

As per our current production we will be able to handle both still and sparkling products without the need to blend product separately in to a pre-mix through the use of an in-line mixer system.

Barring any major issues as we bring the line in for a complete overhaul we anticipate that we will be ready to commence production on this new platform in the mid part of next year (2013).

In the meantime, if you have an interest in using the extra capacity then please let us know as we anticipate that we will have to manage the use very carefully.

With this addition we think that we will be the most flexible bottling company in the UK, capable of taking customers from 5 litres to 25,000 litres per day.  More importantly we believe that the smaller customer is just as important and we still want to help those very small and just-starting-out as much as we can.  After all, they may be the next big thing!