A tax on sugary drinks comes into effect in the UK on Friday as part of a drive to reduce obesity. The levy has been welcomed by one soft drinks startup, which has tasked itself with turning one of the world’s most popular consumer products into a force for good
In the time it takes you to read this article, roughly five million Coca-Cola drinks will have been consumed around the world. By the end of the day? The figure will stand at 1.9bn.
And that’s just Coca-Cola. Those statistics don’t include the likes of Pepsi, Dr Pepper or Scottish drinks brand Barr’s – some of the other major players in the multibillion-pound soft drinks industry. Sugared drinks are coming under ever-increasing scrutiny due to their links to diabetes, obesity and other issues such as plastic pollution.
In a bid to mitigate the health impact of such products, the UK government will introduce a new tax on sugary drinks on Friday (6 April). Similar levies have already been rolled out in the United Arab Emirates and France, as well as in Hungary, where the consumption of sugar-sweetened soft drinks has reportedly fallen by 19 per cent as a result.
Even before the UK’s tax has been implemented, it has had an impact. The sugar content of some soft drinks has been slashed by manufacturers in a bid to avoid the threshold for the levy. Supporters claim the tax is a victory for public health, while most drinks companies oppose it on the grounds that it will be ‘ineffective’ and leave consumers out of pocket.
There are two bands under the levy: a 24p per litre level for drinks with 8g of sugar per 100ml, and an 18p per litre level for drinks with 5g of sugar per 100ml. The proceeds will go towards funding sport in primary schools.
Soft drinks company Karma Cola has welcomed the tax, even though it will be levied on some of its products.
“Sugar isn’t bad, but too much of it is, and we think the tax is a good thing if it stops the over-consumption of sugar,” says Albert Tucker who is chairman of the Karma Cola Foundation. “We always say that if you’re thirsty, you should drink water. Fizzy drinks should be a treat, not part of your regular diet – that way you will enjoy them more.”
A brand that happily advises people against consuming its products in large quantities might be rare. But for Karma Cola, it is part of a wider strategy to turn fizzy drinks – seen as one of the world’s most popular consumer products – into something positive.
“We have tried to build a business that has good karma, hence the name,” says Tucker. “Our mission is to create real drinks using real ingredients that are helping to feed small farmers in developing countries.”
Sugar isn’t bad, but too much of it is, and we think the tax is a good thing if it stops the over-consumption of sugar
Guided by the principles of the Fairtrade movement, of which Tucker was a pioneer, Karma Cola has built a business that benefits the unsung west African communities that discovered cola in the first place.
“Billions of cola drinks are consumed every day, but the people who discovered the cola nut don’t actually make any money out of it because big drinks companies no longer use it as an ingredient – they use artificial flavours instead,” says Tucker. “We were shocked to learn this and decided to do something about it.”
Having grown up in west Africa, Albert was well aware of the cultural significance of the cola nut, which is harvested from the Gola forest in Sierra Leone. In Sierra Leone, it is used in cooking, medicine and as a natural stimulant. It is also considered a symbol of friendship. “He who brings cola,” the saying goes, “brings life”.
Because most cola companies no longer use the very ingredient their drinks are named after, the cola nut has ceased to be a globally traded commodity. It is therefore not certified by Fairtrade, so Karma Cola had to blaze its own ethical trail.
“We realised early on that because we weren’t buying huge volumes of cola, we weren’t actually making much of a difference. So we set up a foundation that enabled us to return some of our profits to local communities,” says Tucker. “These are poor communities,” he explains, “but they are trying to conserve the forest around them, which ultimately will benefit all of us”.
The Karma Cola Foundation was founded on the belief that the communities it supports in the Tiwai region of Sierra Leone know what’s best for them. This is why locals decide which projects they want the foundation to fund.
Every recyclable glass bottle or recyclable aluminium can of Karma Cola that is sold generates 3p for the Karma Cola Foundation. The money has already funded education programmes for children, training for young entrepreneurs and the construction of Makenneh bridge, which has connected the once-divided village of Boma.
“We want to limit the idea that we are coming to ‘save’ communities,” says Tucker. “We just want to make sure that the people we’re doing business with are able to do better; that they have a healthy diet, access to healthcare, education and a sustainable, independent farming future.”
We want to limit the idea that we are coming to ‘save’ communities. We just want to make sure that the people we’re doing business with are able to do better
It’s an ethos that has resonated with restaurant chains such as Jamie’s Italian, Wahaca and Honest Burger – not to mention retailers like Waitrose, Whole Foods and Ocado – all of which sell Karma Cola’s fizzy drinks. (In addition to the brand’s flagship cola drink there’s an orangeade, lemonade and ginger ale.)
“I’m encouraged that a lot of our customers are interested in making sure their businesses contribute something,” says Tucker. “We need to get more businesses thinking like that.”
He is also heartened to see a new wave of ethical entrepreneurs emerging into the marketplace. People who, like the Karma Cola team, are building businesses based on fair trade principles. Enterprises like Source Climate Change Coffee, which helps farmers to cultivate coffee in a sustainable way; and Ético, which champions gender equality and the environment through its work with small-scale agricultural cooperatives.
Such businesses, Tucker argues, are also good for consumers because more often than not they are focused on quality as well as ethics.
“Normally businesses like these are so do-gooder that we forget these are premium products from people who work hard to make sure they are good,” says Tucker. “But for me that’s critical.”
There are challenges, of course. Ethical products often cost more than those sourced with less scrutiny because they are not based on exploitation – of people or the environment.
“It’s not always easy being ethical,” acknowledges Tucker. “The market imperative – particularly in the context of things like the economic crisis – can push us all to try and replicate what is already there. I think sometimes there is a race to the bottom, which we need to resist.”
Karma Cola is also resisting the temptation to get around the sugar tax by using synthetic sweeteners – a route many brands have gone down – arguing that it would have a negative impact on its sugar suppliers and expose consumers to non-organic ingredients.
“We won’t be making our drinks cheaper by using artificial ingredients that are formulated in a factory,” asserts Tucker. “We will continue to use all natural, great tasting, quality ingredients, and pay our farmers a fair price – and I hope consumers will reward businesses like ours for operating this way.”
The Fairtrade movement was founded in the early 90s to help producers in developing nations achieve better trading conditions and to promote sustainable farming techniques.
Albert Tucker, one of its early pioneers, believes the movement has achieved more than its stated goals. “We hear a lot about anti-poverty and development projects, but for me one of the greatest things Fairtrade did was to change producers’ perspectives on the market and help them better understand it and get more out of it,” he says.
“It has also been partly responsibility for the focus on traceability and has had a great influence in raising awareness about social responsibility. Those consequences, for me, are as important as minimum pricing and development.”
The Fairtrade movement has been criticised for failing to effectively enforce fair trade standards and, in some cases, for an oversupply of certification, which, some believe, drove down prices of certain commodities. Tucker acknowledges that the movement’s success has been something of a double-edged sword.
One of the greatest things Fairtrade did was to change producers’ perspectives on the market
“We all wanted growth – we wanted Fairtrade to be everywhere – but with that quest for growth we found that bigger corporations were seeing Fairtrade as a consumer mark alone and not growing the principles across their business,” he says.
“In the recent past I think Fairtrade has focused too much on trying to get big brands to buy into the values – sometimes that’s worked, other times it hasn’t.”
Nonetheless, Tucker is heartened by the emergence of a new wave of ethically-minded businesses, which seem to be following the principles of Fairtrade.
“I’m encouraged by the young entrepreneurs that I have seen setting up these new enterprises and hipster businesses, which seem interested in social impact and limiting the damage they cause,” he says. “They might not have the Fairtrade labelling, but – though it’s very early days – they seem to be carrying the principles of the movement.”
Images: Karma Cola