Soda Makers Commit to More Low-Calorie Products
By Steve Holtz on Oct. 31, 2016ATLANTA and PURCHASE, N.Y. -- The two largest soft-drink companies in the United States both committed to cutting sugar in its beverages in response to mounting regulation and taxes and growing concerns about obesity.
Next week, four U.S. cities are voting on ballot initiatives that could add 1 or 2 cents per ounce to the price of sugar-sweetened drinks. The proposed taxes in Boulder, Colo., and San Francisco, Oakland and Albany, Calif., each aim to curb consumption of high-calorie drinks while variously funding local health programs and other initiatives.
Meanwhile, the city of Philadelphia and Illinois' Cook County, which includes Chicago, have become major battlegrounds for soda taxes. In Philly, the American Beverage Association (ABA) has filed a lawsuit asking a Pennsylvania judge to enjoin and declare the city's 1.5-cent-per-ounce levy invalid. And in Chicago, the ABA took a proactive stance, launching a campaign against raising taxes on sugary drinks before the County Board officially proposed such an effort.
Now the two major soda companies, both of which support the ABA, are making their own moves through their products ...
Coca-Cola Co.
The Coca-Cola Co. has more than 200 drink-reformulation initiatives underway to reduce added sugar across its carbonated-soft-drink portfolio, James Quincey, president and chief operating officer, said during a recent earnings conference call.
"We are [emphasizing] our sparkling portfolio strategy so that we can grow while reducing sugar consumption," Quincey said. "We are also providing more sugar-free options. In several markets around the world, we have launched Coca-Cola Zero Sugar, with a new and improved taste as well as a new visual identity system under our One Brand strategy. And this is contributing high single-digit volume growth for this brand globally in the quarter."
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Coca-Cola Co.
In Great Britain, the company has "reduced the sugar and the calories in brands such as Sprite and Fanta by 30%," Quincey said on Oct. 26. "In our Latin Center business unit, we reduced the sugar content in almost two-thirds of our flavored sparkling beverages."
Specifically in the United States, Coca-Cola Co. has "extended smartwater into sparkling water. We revamped the packaging graphics on Dasani Sparkling, resulting in retail value growth of over 80% in the quarter for these two products," Quincey said. "We expanded the Honest Tea trademark into juice drinks, with Honest Kids becoming the No. 1 organic juice drink chosen for kids."
Coke has also focused on package size to make a difference.
“Small pack size [is] a great way to enjoy a drink with less calories," he said. "These packs can provide both a premium experience, as well as being an affordable, yet profitable way to bring people into the franchise."
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PepsiCo
Earlier in October, PepsiCo chairman and CEO Indra Nooyi pledged as part of a new sustainability initiative to significantly reduce the calorie count of the company's beverages as it looks to counter health concerns about sugar-sweetened beverages, according to a CNBC report. The effort is a response to changing consumer preferences, she said.
"Over the last decade, we have made progress in reducing sugar," Nooyi told CNBC. "But there's a lot more we needed to do because countries which loved sugar were growing faster than countries which were consuming lower-sugar products.
"We have to make sure that our products meet the changing consumer needs."
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PepsiCo
According to PepsiCo, at least two-thirds of the company's beverages will contain 100 calories or less per 12-ounce serving by 2025. As part of the initiative, the company will increase the focus on zero or lower-calorie products.
At the same time, PepsiCo has been pushing its low-calorie offerings, including a relaunched Diet Pepsi with aspartame. This summer it announced new brand Pepsi Zero Sugar, replacing Pepsi Max.
"Technology breakthroughs right now are resulting in better-tasting colas, almost as good as the full-sugar colas, but with lower calories," Nooyi said. "So we're now faced with [an] interesting opportunity to step the consumer down to lower sweetness levels."