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Sugar guidelines could hurt soft drink firms

New York, August 25, 2009

The American Heart Association's recommendation to cut back dramatically on sugar may be a blow or opportunity for soft drink makers, who have been accused of helping fuel the US obesity epidemic.

Hurt by an ailing economy and expanding waistlines, consumers have cut back on soft drinks. After years of growth, US carbonated soft drink sales by volume fell for the first time in 2005, and the decline has accelerated each year since.

Volumes fell 3 per cent last year, the biggest drop since at least the early 1980s, Beverage Digest, a US-based industry publication, reported in March.

The AHA's new guidelines say women should eat no more than 100 calories of added sugar per day, or six teaspoons (25 grams), while most men should keep it to just 150 calories or nine teaspoons (37.5 grams).

That's far below the 22 teaspoons (90 grams) or 355 calories of added sugar consumed by the average American each day, according to a 2004 government survey.

It also singled out soft drinks as the top source of 'discretionary' sugar calories.

Edward Jones analyst Jack Russo said the new guidelines could give some consumers sticker shock in the short term but also might encourage PepsiCo Inc. and Coca-Cola Co. to focus even more on developing healthier options.

'In some crazy way, even if this gains some groundswell, these two companies are pretty quick to have a Plan B ready and they could actually develop some new products, even on the soft drink side, that could be touted as healthier and could improve their businesses,' Russo said.

Russo cited McDonald's Corp as an example, saying the fast-food chain has had success with healthier menu items, such as salads and apple dippers, after its menu was criticized by health activists.

'As we continue to morph into more health and wellness issues, this is going to be a recurring focus. The quicker these companies are to react to this the better.'     He said both companies are developing lower-calorie drinks, such as those made with a new natural, no-calorie sweetener derived from the stevia plant.

Coke, PepsiCo and other soft drink makers have seized upon the growing move toward low-calorie products, expanding in recent years their offerings of diet sodas, bottled waters and other healthier drinks.

'The industry has been talking about the need to consume regular soft drinks in moderation,' said Beverage Digest editor John Sicher, who predicted that the new guidelines would not be a big blow for soft drink firms.

'Obesity Epidemic'    

Currently, diet sodas account for about 30 per cent of all carbonated soft drink sales, with full-calorie sodas making up 70 per cent, according to Beverage Digest.

Still, the findings, combined with high health costs linked with obesity, may renew interest in a soft drink tax, a policy favored by Dr. Thomas Frieden, director of the US Centers for Disease Control and Prevention, but not officially sanctioned by the Obama administration.

Frieden said during a news conference last month that soda and sugar-sweetened beverages 'play a particular role in the obesity epidemic,' noting that Americans consume an extra 150 calories more per day in sugar-sweetened beverages than two to three decades ago.

He said adding a tax to soft drinks might curb consumption.

Obesity-related diseases account for nearly 10 per cent of all medical spending in the United States, or an estimated $147 billion a year, according to a CDC-sponsored study released last month.

More than 26 per cent of Americans are obese, which means they have a body mass index of 30 or higher. BMI is equal to weight in kilograms divided by height in meters squared. A person 5 feet 5 inches tall (165 cm) becomes obese at 180 pounds (82 kg). – Reuters<


Tags: Coke | Pepsi | New York | Sugar | soft drinks |

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