In a 2012 study titled “Sugar consumption at a crossroads” by Credit Suisse, the soda consumption per capita in America was so high that had to literally expand the chart to make it. According to the Obesity Society, Americans now consume 30% more sugar daily than three decades ago. So, how much soda do we drink, anyway? According to an Associated Press report, Americans consumes 44 gallons of the soda per year. Within the broader context, we’re moving towards an age where we need to cut down on excessive sugar consumption and sugar-infused beverages. Last week, PepsiCo announced that by 2025, it will reduce sugar in sodas to build a more sustainable global food system.
Pledge to Reduce Sugar in Sodas by 2025
PepsiCo has set a global target to reduce the sugar in its flagship sugar-based Pepsi drink. The change was driven by evolving consumer needs and latest dietary guidelines from the World Health Organization.
Currently, less than forty percent of its drinks have 100 calories or fewer. By 2025, two-thirds of its single serving drinks will have 100 or fewer calories as it cuts back on sugar.
Pepsi announced last year it would stop using the artificial sweetener aspartame due to consumer backlash. Scientific studies have linked artificial sweeteners to metabolic diseases.
The beverage giant which owns Pepsi, Gatorade, Tropicana and Mountain Dew, said its goals are informed by the new dietary guidelines of the World Health Organization. These guidelines recommend that people limit sugar consumption to less than 10 percent of their daily calories. The WHO also recommended taxes on sugar-sweetened drinks to curb consumption and improve health. Mexico and France have imposed taxes on beverages with added powder, flavor extract, syrup, sugar, or caloric sweeteners.
Coca-Cola is attempting a similar ‘sugar-free makeover’. During a Q&A in July, COO James Quincey said the company is finding ways to cut sugar and calories. Coca-Cola Company is also investing in juice, coffee, tea, and bottled water.
Evolving Consumer Needs
With the increase in zero or low-calorie flavored water products, consumers can enjoy a guilt-free drinking experience. With the ubiquity of brands such as LaCroix and Vita Coco, it has become ever easier for consumers to ditch the sodas.
For Pepsi – Cola, sugary sodas are no longer the backbone of the business. To survive due to evolving consumer demand, the beverage giants need to reduce sugar in sodas. The companies are moving to diversify their offerings and grow revenue with drinks such as coffee, tea, and bottled water.
Soda companies are fighting the decline in consumption by shrinking the size of cans and bottles. Smaller cans contain fewer total calories and are much more appealing to the consumer. However, they generally cost more per ounce. For example, an 8.5-ounce bottle of Coke generated $1.60 in revenue per purchase. On the other hand, a 2-litre gallon only generates $0.18, this is nearly nine times the revenue.