The London 2012 Olympics was arguably the biggest event to capture the attention of the British public this year. Touching seemingly every part of the nation, the government’s plan was to inspire a sporting culture in every city, school and street. However, I would argue that not every subsequent action has been conducted in the spirit of this goal.
Besides the more obvious post-Olympic changes in the public’s attitude to sport (greater participation in sports clubs/societies, increased uptake of gym memberships etc), what has also been noticeable is a shift in consumer taste when it comes to sports nutrition.
Prior to the build-up for London 2012, sugary sports drinks that target rehydration and energy provision (think Lucozade, Powerade and Vitamin Water) were longstanding, popular choices for those with moderately active lifestyles. The London Olympics, however, saw consumer preference shift towards protein-based products and brands such as Maximuscle, Met-Rx and USN.
These products address nutritional needs by optimising muscle recovery and supporting lean muscle growth, as well as increasing the metabolic rate and decreasing hunger to better enable fat loss.
This all sounds highly desirable. Indeed, this category of sports drink has become so popular – Euromonitor reports that retail value sales in the UK grew by 14% in 2011 to reach £230m, and are expected to reach £414m by 2016 – that products are filtering from specialist online retailers such as Affordable Supplements and Bulk Powders into the mainstream. They can now be found in the likes of Tesco, Boots and Argos, as well as health stores such as Holland & Barrett, the outlet via which they first entered the British high street.
There are many possible factors fuelling this shift. These include, but are not limited to:
It could be expected that the UK government, having spent over £9bn to host the Olympics and winning the bid on their promise to provide a ‘sporting legacy’, would welcome consumers embracing sports drinks that are more targeted in their nutritional requirements. However, shortly after extinguishing the Olympic flame, they have instead begun to tax the sports supplements industry by removing the zero rating previously applied to sports nutrition drinks.
Simply explained, where sugary sports drinks face a certain level of tax, protein-based sports drinks were previously exempt as they were classified as a food item; that is, a product with a significant nutritional content. The government has now amended this clause, consolidating all sports drinks under the same tax requirements, thus increasing the cost of these products by as much as 20%.
The justification provided by HM Revenue & Customs for the taxation change is that a number of ‘borderline anomalies’ needed to be reassessed, so that ‘[all] sports nutrition drinks [will be taxed] at the standard rate [to ensure] that all sports drinks receive the same treatment whether or not they are consumed for nutritional purposes’.
The government’s actions are an untimely reminder that clashes in policy can often be immediate and somewhat shortsighted.
But is this really all that surprising? Over the past 10 years, the British economy has benefitted from the growth of the sports supplements industry, largely due to the fact that the major players in the UK market are now British rather than American. I wonder if it has simply been targeted as an easy sector to tax.
The sports supplement industry is understandably fighting certain aspects of the new legislation, arguing that carbohydrate-based energy drinks and protein-based supplements are completely different propositions. After all, milk is not subject to VAT and most sports supplements are simply its derivatives. So watch this space!
All tax and financial implications aside, protein-based products look to be the preferred sports drink of 2013, particularly as the category itself has continued to develop.
Where previous options typically required a powder to be mixed with water or milk, pre-mixed options such as MaxiMilk are set to hit high-street chiller shelves in a big way in 2013, following the lead taken by the likes of For Goodness Shakes and the repositioning of Mars Refuel drink.
These ready-made solutions offer the nutritional boost of a protein-based sports supplement with all the same convenience of the sugary sports drinks of the past. I see these as being a huge trend next year and hope, as a consumer of them myself, that increasingly active members of the public will be able to afford to enjoy them as part of a healthy, energetic lifestyle.
Adam Curtis is associate director at MMR Research Worldwide.
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