Soda makers aim to improve health profiles with natural and low-calorie sweeteners
Major soft drink makers have chosen a curious ingredient to lure the health-conscious back to the category: sugar.
The sweetener replaces high fructose corn syrup in PepsiCo's Sierra Mist Natural — a remake of Sierra Mist lemon-lime soda — and is blended with stevia extract to sweeten the Coca-Cola Co.'s reduced-calorie Sprite line extension, Sprite Green.
Other sugar-sweetened carbonated soft drinks — such as Pepsi Throwback, Mountain Dew Throwback, Coca-Cola from Mexico and Coke made kosher for Passover — are available in the U.S., but the vast majority of CSDs are sweetened with high fructose corn syrup.
Though sugar-sweetened sodas were once the norm, high fructose corn syrup gained popularity 30 years ago when a system of sugar tariffs and quotas imposed in the U.S. significantly increased the cost of imported sugar. Today high fructose corn syrup remains king, as the most commonly added sweetener in processed food and beverages, and especially sodas and fruit-flavored drinks due to price and since its liquid form is easily blended, Audrae Ericson, president of the Corn Refiners Association, Washington, told SN.
But a segment of consumers has grown averse to the ingredient, with more than half of Americans agreeing that high fructose corn syrup may pose a health concern, according to Harry Balzer, chief industry analyst and vice president of the NPD Group, Port Washington, N.Y.
The trend is one that Amy McLeod, director of food and nutrition services at Brookshire Brothers, Lufkin, Texas, has witnessed first-hand.
“People want to hyper-focus on one cause for weight gain instead of practicing balance and moderation. They're always looking for one particular additive to blame,” she said. McLeod sees demonizing high fructose corn syrup as counterproductive since the body treats it the same as other sweeteners. Rather than avoid the additive, she recommends focusing on total carbs and whether breads, cereals and other foods likely sweetened with high fructose corn syrup contain enough fiber.
The Grocery Manufacturers Association, likewise, deems the ingredient safe, but that hasn't stopped manufacturers from rethinking their choice of sweetener.
Heinz and Hunts' ketchups, PepsiCo's Gatorade, Kraft Foods' Wheat Thins, Ocean Spray Cranberry Juice and Starbuck's baked goods have been reformulated to eliminate the controversial ingredient as part of an effort to give Americans what they want.
Retailers are also getting in on the act. Last September, Fresh & Easy Neighborhood Market rid its private labels of high fructose corn syrup at the request of shoppers and now the H.E. Butt Grocery Co. is considering the same, Rosalinda Benner, nutrition specialist with H-E-B, told SN. “We're just in the development stage,” she said.
The changes follow a more drastic step by certified organic grocer PCC Natural Markets, which began the laborious process in 2007 of eliminating high fructose corn syrup-containing products from its shelves. Today it's CSD selection includes specialty brands like Zevia, Natural Brew, Oogave, Virgil's and Blue Sky.
“Zevia, sweetened with stevia, has been a tremendous success story,” said the chain's merchandiser, Stephanie Steiner. “Blue Sky has created sugar-free sodas to compete with Zevia.”
Consumers are also wielding their influence in the mainstream CSD space, with nearly six in 10 (59%) agreeing that high fructose corn syrup is bad for health and manufacturers should use real sugar to sweeten soda beverages, according to a Mintel poll.
Although it doesn't see a mass movement away from high fructose corn syrup, PepsiCo created its Sierra Mist Natural to draw shoppers seeking natural sweeteners back to the struggling CSD category, said Jonathan McIntyre, senior vice president of research and development for global beverage at PepsiCo.
“There has been a reduction in consumption of carbonated soft drinks, some driven by avoidance of artificial ingredients,” McIntyre explained.
PepsiCo's lemon-lime remake doesn't contain artificial sweeteners, flavors or preservatives, just five natural ingredients: carbonated water, natural flavor, sugar, citric acid and potassium citrate. A redesigned can emphasizes that the product is “made with real sugar.”
Sierra Mist Natural is more costly to produce, but PepsiCo is eating the difference.
“Sucrose is more expensive than high fructose corn syrup, but we've kept the price to the consumer the same,” McIntyre said.
To make a big splash, PepsiCo gave away at least 10 million free cans of Sierra Mist Natural at Wal-Mart Stores during its introduction last fall. Costing an estimated $3 million, the promotion was part of a fourth-quarter campaign during which PepsiCo spent as much on the brand as it usually spends in a year, according to published reports.
The soda maker chose Wal-Mart in particular not necessarily for its shopper demographic, but its unequaled size. “There was no way we could get that much exposure in any other format other than doing this at Wal-Mart,” McIntyre said. “It was huge and almost unprecedented.”
SN could not obtain sales figures for Sierra Mist Natural from PepsiCo or other sources, but McIntyre is pleased with its performance. “We're very happy,” he said.
The success comes as overall sales of carbonated soft drinks continue to fall. But in order to appreciate the trend, one must consider the sheer volume of the category.
More than $11.8 billion in sales of soda were made in the food channel during the 52 weeks ending Dec. 26, 2010, representing a drop of almost 3% in dollar sales vs. the previous year, according to SymphonyIRI Group, a Chicago-based market research firm. Unit sales during this time were down 2.6% to 5.5 billion.
Optimists view the change as a drop in the bucket, considering that soda is still the most consumed non-alcoholic beverage for sale in the grocery store, according to Mintel's senior consumer analyst, Garima Goel Lal. The category also enjoys high penetration, with nearly six in 10 Americans (58%) planning to indulge in at least one soft drink within the next two weeks, according to Balzer. “That's [based on] all individuals including mom, dad, grandma and grandpop,” he said.
Though the rate of decline has slowed, the category remains soft, noted Hemphill, who points to the proliferation of other refreshments.
“People consume roughly the same amount of liquids annually — about a half gallon a day — but 30 years ago there were few alternatives to CSDs so the category had the playing field to itself,” he said.
In recent years, soda has lost share to segments such as energy drinks, which provide a boost like sodas, and carbonated juices, which have the same effervescence, according to Mintel. Diet soda and seltzer water/natural sodas are also siphoning share.
Then there is continued emphasis on the role of sugary beverages in obesity, as highlighted by Michelle Obama's Let's Move campaign. This has not only influenced a drop in soda consumption by kids and teens, but a fall in sales of naturally sweetened juices that are high in sugar. “We're starting to get responses like, ‘I notice [juice] is high in sugar so I don't drink it,’” said Goel Lal.
As more consumers opt for water, CSD brands are exploring ways to reverse the trend. Coca-Cola is banking on its zero-calorie Truvia natural sweetener — a stevia-based sugar substitute developed jointly by Coca-Cola and Cargill.
Sprite Green became the first-ever sparkling drink to use Truvia (blended with sugar) when it was introduced in December 2008. The reduced-calorie line extension has 50 calories per 8.5 ounce serving and contains 5% lemon juice.
Coca-Cola uses Truvia to sweeten Glacéau VitaminWater Zero, Odwalla Light Lemonade, Odwalla Protein Monster and Minute Maid Pomegranate flavored tea, but more carbonated soft drink applications could follow.
“We look at products where stevia extract delivers great taste and where consumers want the option of reduced calories and a natural sweetener,” said Diana Garza Ciarlante, vice president of sustainability for Coca-Cola refreshment.
Meanwhile PepsiCo, which markets zero-calorie versions of SoBe LifeWater with PureVia brand of stevia sweetener created by the Whole Earth Sweetener Co., is working to discover, develop and commercialize sweet enhancers and natural high-potency sweeteners that can be used in lower-calorie Pepsi beverages as part of a partnership with San Diego-based Senomyx.
PepsiCo is confident the collaboration will help it achieve its commitment to reduce added sugar per serving by 25% in key brands in key markets over the next decade.