Should Soda Taxes Include RTD Coffee Drinks? – CoffeeTalk

Ready-to-drink (RTD) coffee is a growing market, with a CAGR of 8.54% 2020-2032, reaching $64.78bn by 2032. This growth is driven by the convenience of the on-the-go format and the sweet taste of RTD coffee, which attracts younger generations who are known to gravitate towards sweeter formats. However, RTD coffee can also contain high sugar levels, as many iced coffees in the US contain more added sugar than the FDA recommends consuming in an entire day, and others can contain far more sugar than that found in soda. A 2024 study found that an average RTD coffee sold in Indonesia contributes to 35.7% of the daily recommended dietary allowance of sugar, with researchers calling on the government to limit sugar content in such products.

In the UK, RTD coffee is currently exempt from the Soft Drinks Industry Levy, which was introduced in 2018 to tackle childhood obesity. However, RTD coffees often come in at over 5g sugar per 100ml, placing them in the higher band of the UK’s sugar tax. A revamp of the levy could now see milk-based and milk-based alternatives become subject to the tax. Action on Sugar, a UK campaign group, believes that tackling the high sugar in RTD coffees is a key move to encourage companies to innovate and reduce the amount of sugar.

Market analysts have pointed out that high sugar content could be enough to hold growth in the category back. If the category wants to ride the wave of today’s coffee culture, it needs to be held to the same standards as other types of drinks. Marketers should not market something as a convenient café-quality coffee and then load it with sugar or sweeteners for taste. If the category wants to grow up and be taken seriously as a part of daily life, like the coffee shop experience it tries to emulate, then it needs to be held to the same standards.

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