With diet drinks unappealing to some, the industry pursues its 'holy grail' — a natural product
By CAROLINE WILBERT
The Atlanta Journal-Constitution
Published on: 01/29/06
Elizabeth Golden doesn't even slow down as she pushes her grocery cart down the soft drink aisle at Publix in Buckhead. Golden, 60, gave up Coca-Cola a couple of years ago because of the sugar.
Why doesn't she substitute a diet version?
"I just don't think they are good for you," she explains, adding that she installed a water purification system in her home and mostly drinks water now.
Golden represents the soft drink industry's biggest fear.
Many Americans, concerned about calories, are giving up lifelong habits of drinking sugary soda. Some switch to diet soft drinks. However, some don't, either because they don't like the taste, or increasingly, because they worry about the safety of sweeteners.
Morgan Stanley analyst Bill Pecoriello says beverage companies "need to aggressively develop new sweetener solutions with more consumer appeal."
Though beverage executives will tell you that sweeteners like aspartame and sucralose have been tested and are safe, they acknowledge that many consumers still are uncomfortable with the artificial ingredients. As consumers become more focused on healthful, all-natural products, beverage companies want to ensure diet soft drink sales keep growing.
Coke Chairman and CEO Neville Isdell has said the company is searching for an all-natural sweetener, calling it "the holy grail."
Coke isn't alone. John Cahill, CEO of Pepsi Bottling Group, was asked about the quest for a natural sweetener at a recent beverage conference.
"I am aware that all the major companies are looking at these alternatives," he said. "I think it would be helpful."
Certainly, existing diet soft drinks with artificial sweeteners still are a large and profitable business for companies like Coke, Pepsi and Cadbury Schweppes, which owns Dr Pepper. Diet soft drinks were a $19 billion business in 2004, according to Beverage Digest.
And the diet market has continued to grow, despite decades of controversy about whether artificial sweeteners are bad for people.
Concerns about saccharin, one of the first artificial sweeteners, have been around for nearly a half-century. The Food and Drug Administration sought to ban it in 1977, but Congress instead required that products containing the sweetener carry a warning label that said: "Use of this product may be hazardous to your health. This product contains saccharin, which has been determined to cause cancer in laboratory animals." After additional research, the mandatory warning was rescinded in 2000.
Aspartame, also known by its brand name NutraSweet, has been controversial since the FDA approved it in the early 1980s. Though the FDA says it is one of the most thoroughly tested products ever approved, there are still groups that claim it causes everything from brain tumors to multiple sclerosis.
Sucralose, marketed as Splenda, was approved by the FDA in 1998 and has ignited its own controversy. Critics say the food industry has misled consumers into thinking the sweetener is natural, because it is derived from sugar.
Nelson Martinez, 46, a customer at the same Buckhead Publix where Golden shops, said he drinks diet sodas and particularly likes Coke Zero, which contains a blend of aspartame and acesulfame potassium. If you worry about every health report you see, he said with a chuckle, "you can't have anything."
The 'natural' trend
But more consumers today are gravitating toward products perceived as natural.
"People are increasingly nervous about what they put in their bodies," said Michael Bellas, chief executive at Beverage Marketing Corp., a consulting firm. "You are what you eat."
Among people who are drinking less regular cola, only 21 percent are drinking more diet cola, according to a report from Morgan Stanley Consumer Research. By contrast, 46 percent are drinking more bottled water.
The research also shows that 73 percent of people say at least one reason they abstain from diet drinks is they don't like the taste. The No. 2 reason, with 40 percent of people citing it, is that they don't like artificial sweeteners.
The problem is that developing an all-natural, good-tasting sweetener without calories is no easy task.
"They don't call it the holy grail for no reason," said Craig Petray, CEO of NutraSweet, which sells aspartame to thousands of companies, including the major soft drink players. "It is very hard to get to."
Petray said NutraSweet's former owner, Monsanto Co., researched all-natural sweeteners in the 1990s but gave up, deciding to focus on new artificial sweeteners, including Neotame, which NutraSweet now is marketing to food and beverage companies. Neotame, approved by the FDA in 2002 , is 8,000 times sweeter than sugar and can be used to enhance the taste of sugar.
Petray said he thinks the next major change will be the use of such sweetener enhancers, which would allow soft drink companies to put less sugar in regular soft drinks but get the same taste. Therefore, as an example, 8 ounces of Pepsi might have 80 calories instead of 100.
If Petray believed a viable all-natural sweetener could make it to the market in five or 10 years, he would be working on it, he said.
The artificial sweeteners on the market today, things like Splenda, saccharin and aspartame, actually do have calories. The key is that they are high-intensity sweeteners, meaning that they are significantly sweeter than sugar. Because of the intense sweetness, a very small amount of the sweetener is needed, making the caloric content so small as to be essentially zero, said Sara Risch, an expert in food science and a professor at Michigan State University. Most diet soft drinks have such a low caloric content that their labels say zero calories.
Risch said nobody has discovered a sweetener in nature with the necessary level of intensity.
'A very difficult challenge'
High-intensity sweeteners therefore are made by chemically altering an existing substance. For instance, the relatively new sweetener Splenda is sucrose, or sugar, that has been chemically altered with chlorine.
The trick, Risch said, would be to find a natural substance, likely a plant or bacteria, that could be altered through a natural process, such as fermentation.
"It is a very difficult challenge, but if they solve it, it will be a phenomenal breakthrough," Risch said.
There are sweeteners out there that are natural with nearly zero calories. However, the consensus is that the sweeteners don't taste good enough to appeal to mainstream consumers. The most well-known is stevia, which comes from a plant in South America. Stevia is sweeter than sugar and is known for its strong licorice taste. Stevia has not been approved by the FDA for use in drinks and food in the United States but is approved for use as a dietary supplement.
Coke isn't commenting on specific plans or research.
Coke spokeswoman Kari Bjorhus said, "We're confident in the quality and safety of sweeteners in use today, but we are always interested in new sweetener options that might offer a different taste profile or be more appealing to some people."
A Pepsi spokesman also declined to comment on anything specific the company might be looking into.
"We offer a wide variety of low-calorie beverages that taste great and help people cut calories or maintain their weight," said Dave DeCecco at Pepsi. "We're already using several low-calorie sweeteners in these products and if a new sweetener is developed, we'll certainly consider using it."