The UK’s soft drinks industry is at a crossroads. Between the so-called sugar tax that came into effect in April 2018 and changing consumer sentiment towards fizzy drinks, beverage brands are positioning themselves in a variety of ways to stay relevant and gain an edge on rivals. Borrowing from the craft beer movement, Dutch brand Neko Jusu is bringing its premium lemonade range to Britain, aiming to exploit the demand for upmarket, artisanal drinks.
Neko Jusu was created in 2016 by Camille Parthesius. At the time, she was working as a ramen chef at an Amsterdam-based Japanese restaurant when she noticed how enthusiastic her customers were when presented with new, exotic food and drink, especially unusual twists on everyday items. Parthesius started experimenting with soft drinks in her own kitchen before settling on a non-fizzy lemonade, which she then flavoured with rose & hibiscus and orange & ginger. Both drinks proved a hit with customers, so Pathersius moved operations into a local craft brewery, where she now produces small batches of each one. And it’s not just the use of a brewery where the craft movement’s influence can be seen, but in the branding too, guiding everything from the design of the bottle to its labelling.
“What you can taste in a Neko Jusu is each fruit used, as well as the herbaceous flavourings, such as the hibiscus or the ginger,” says Gregory Miller, Neko Jusu’s head of operations in the UK. “We don’t use any artificial flavours or colourings in our products, and they only contain natural sugars, therefore they can be considered a fairly healthy alternative to the traditional carbonated lemonades on the market. The palate of taste is pretty intriguing, but can actually differ slightly from batch to batch – much like a fine wine.” 
Each drink’s taste profile can be considerably altered when mixed with different types of alcohol, and have been carefully balanced to complement spirits such as vodka and gin. “We also offer a suggested cocktail pairing menu and we love working with people to create their own signature cocktail using our products,” Miller adds.  Neko Jusu sells for between £3 and £4 per 250ml bottle, signalling its premium credentials.
Health-conscious Britons have lost their taste for sugary sodas
Sergio Souza (2018) ©
The UK’s soft drink industry was worth £15.3 billion as of 2017, having grown steadily year-on-year since 2013.  Yet the sector may be facing a difficult period after the government’s introduction of a sugar tax in an attempt to combat childhood obesity. The tax adds 18p per litre on to drinks that contain 5-8g of sugar per 100ml and 24p per litre on to those that surpass that threshold. “Our teenagers consume nearly a bathtub of sugary drinks each year on average, fuelling a worrying obesity trend,” said Public Health Minister Steve Brine. “The levy is a ground-breaking policy that will help to reduce sugar intake.” 
The sugar tax may accelerate the declining consumption of soft drinks among Britons – in 2011, the average person drank 213.4 litres, which had dropped to 206.2 litres in 2016.  As people become more alert to the sugar content of popular soft drinks, many are looking for healthier alternatives, and the bottled water industry has benefited as a result, with consumption of water drinks in the UK increasing by 7% in 2017, reaching a retail value of £3.1 billion.  Yet the soft drinks sector is still growing, in part due to the rising demand for low-sugar/diet beverages and the efforts of major manufacturers to actually reformulate their recipes and fall in line with consumer expectations. 
Premium soft drinks are also a key driver behind the industry’s growth, despite only making up 5% of the market in 2015/16.  Neko Jusu is joining good company, with mixer maker Fever-Tree and upmarket cola Fentimans two of the market leaders in the premium bracket. The former’s success has been something of a fairytale since floating on the stock market in 2014, with its share price growing eightfold in two years.  Meanwhile, ready-to-drink tea has seen 40% growth globally since 2011, serving as an alternative to carbonated soft drinks with an ‘all-natural’ positioning and antioxidant properties.  And Seedlip targets Britain’s ‘low or no’ drinkers with its non-alcoholic spirits, giving people a way to enjoy the social experience of having a drink without consuming alcohol.
The expectations of booze-free brews at bars are on the rise
Elevate (2018) ©
Insights and opportunities
People in the UK are more health-conscious about their food and drink choices than in the past and want brands to play their part in offering healthier alternatives. In fact, 70% of consumers believe snack manufacturers should be taking active steps to reduce the sugar content in their products. But this doesn’t mean that Britons are adopting a puritanical approach to what they consume. Instead, they want the option of indulging and will pay a premium for goods that cut calories or sugar without compromising on taste. “If brands can offer a ‘healthier’ top-tier of product that is within their original scope of the brand, top-end consumers will often happily pay more for those offerings,” says Anneleigh Jacobsen, a brand expert and consulting editor for Fast Company. 
The successful premiumisation of a product can depend on a brand’s backstory. Neko Jusu is proving to be popular in the bars and restaurants of Amsterdam, and Miller hopes the nod to craft brewing – as well as Neko Jusu’s slightly offbeat backstory – will appeal to British drinkers. “We believe people do like a story and are confident they will pay extra to buy into if it talks to their character,” he says. “We can say with confidence our product tastes great, but half the challenge is convincing our customers that they’re drinking something different. I think by underscoring the Japanese craft influences in our tongue-in-cheek marketing campaign, we communicate this effectively.” 
Other behaviours in play include the fact that Britons are drinking less alcohol – especially younger generations. Almost half of over-16s in the UK claim to avoid drinking on a regular basis, with 27% of 16- to 24-years-old saying they don’t drink at all.  What’s more, 20 million people say they’re happy to consider drinking low- or no-alcohol drinks on a more regular basis.  While brands such as Seedlip target this behaviour specifically, Neko Jusu appeals to both non-drinkers and regular drinkers as it can be enjoyed on its own or as a part of a cocktail.
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