vom 24.07.2013
PAUL ZIOBROCONNECTIt appears sugar isn't the only thing turning some consumers off of soda. Fake sugar is bubbling up as a worry, too.
Larry Young, chief executive of Dr Pepper Snapple, DPS +1.15%is the latest to voice the concerns. On Wednesday's earnings conference call, Mr. Young said consumers "love the bubbles, they love the flavor, but they have concerns about artificial sweetener."
He didn't break down the decline of diet offerings during the quarter, but the company's overall sodas sales volume fell 3%, causing Dr Pepper Snapple to lower its sales outlook for the year.
The common narrative around the decline in U.S. soda sales has been that consumers have become more hesitant about high sugar levels, which have made soda a target in efforts to lower the obesity rate.
Beverage companies that try to maneuver around those objections by emphasizing diet drinks may not have much luck.
Mr. Young's comments were nearly identical to those made by his counterpart at PepsiCo Inc., PEP -0.28%Indra Nooyi, who worried aloud at a conference in May that not addressing concerns about artificial sweeteners soon could cost the industry a generation of consumers.
The trade publication Beverage Digest says sales of diet sodas at Coca-Cola Co. KO -0.49%and PepsiCo fell 6% and 8% by volume, respectively, in the first half of this year. Regular sodas at Coca-Cola, meanwhile, were down 2%, while PepsiCo's regular sodas fell 5%. Dr Pepper Snapple diet sodas sales volume fell 2%, not quite as far as its regular drinks. The publication cited a lack of marketing behind the brands as another reason behind their decline.
The problem for Coca-Cola, PepsiCo and Dr Pepper Snapple is they don't have a good answer for consumers who want a flavored, carbonated drink without an artificial sweetener like aspartame. They are hoping for what's been called the "Holy Grail:" an all-natural, zero calorie sweetener that tastes better than current options. The stevia plant has had some promise, though soda makers are still trying to improve how it works in bubbly drinks.
For now, soda makers are splitting the difference with drinks that blend artificial sweeteners and high fructose corn syrup. PepsiCo's is called Pepsi Next. Dr Pepper's lineup includes Dr Pepper Ten and other "Ten" drinks. Coca-Cola is testing sodas sweetened with a mix of sugar and stevia, including for its main cola brand in Argentina.
Dr Pepper is putting more than $30 million behind the low-calorie soda launch this year. Mr. Young said that a little more than half of all purchases of "Ten" drinks are "incremental" to the soda category, meaning the purchases are coming from shoppers who wouldn't have bought any soda at all
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