• The study, by Brand Finance, projects significant losses for FMCG companies if plain packaging legislation goes ahead.
* Image source: Plain Packaging 2017 Report, December 2017
    The study, by Brand Finance, projects significant losses for FMCG companies if plain packaging legislation goes ahead. * Image source: Plain Packaging 2017 Report, December 2017
Close×

Taking plain packaging beyond the realm of cigarettes and into alcohol and soft drinks could eliminate close to AU$400 billion in sales from the beverage industry, a new report has found.

The report by Brand Finance, available here, analysed the potential financial impact of such a policy on food and beverage brands in four categories: alcohol, confectionery, savoury snacks, and sugary drinks.

The report was hypothetical and based on the impact of brands globally. There are, as yet, no plans to introduce plain packaging to FMCG goods and alcoholic beverages in Australia.

However, an increasing number of countries are introducing strict regulations on the marketing and advertising of food and drink products in an attempt to prevent obesity and lifestyle diseases.

With calls for more intrusive measures growing, the prospect of further applications of plain packaging looks increasingly likely, the report authors said.

Eight major brand-owning companies were predicted to lose a total of $US187 billion should plain packaging be mandated for other FMCG products, with alcohol and sugary drinks brands most vulnerable.

The Coca-Cola Company and PepsiCo are among those corporations with most value at risk: $47.3 and $43 billion respectively, equal to 24 per cent and 27 per cent of their total enterprise values. 

Entire brand portfolios of companies specialising in alcoholic drinks, such as Heineken, AB InBev, and Pernod Ricard, would fall within the scope of the legislation, jeopardising future revenue streams.

An extrapolation of the results to all major alcohol and sugary drinks brands points towards a potential loss of $US293 billion for the beverage industry globally.

The estimates refer to the loss of value derived specifically from brands and do not account for further potential losses resulting from changes in price and volume of the products sold, or illicit trade. Therefore, the total damage to businesses affected is likely to be higher.

Commenting on the findings, David Haigh, CEO of Brand Finance, said: “To apply plain packaging in the food and drink sector would render some of the world’s most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies.

“Predicted loss of brand contribution to companies at risk is only the tip of the iceberg. Plain packaging also means losses in the creative industries, including design and advertising services, which are heavily reliant on FMCG contracts.”

Food & Drink Business

The International Alliance for Responsible Drinking has accelerated its plans to reduce harmful drinking – partnering leading global beer, wine and spirits producers with advertising, public relations, and influencer agencies to ensure alcohol marketing is clearly recognised, responsibly advertised, and aimed at an audience over the legal purchase age.

A new online store, Just a Crumb, has launched to support Australian bakeries in reducing food waste – offering consumers cake offcuts and leftover treats that might otherwise go to waste, delivered to the door.

As the Australian functional beverage market continues to grow, emerging companies are still finding places to slot in. Alcohol recovery drink, Dodge, hit stores in mid-2022, and has taken off across the Asia-Pacific region with its science-backed formula and striking branding. Food & Drink Business spoke with co-founder, Braeden Leahy, about the product and plans for the future.