Sweeteners latest battlefront in soft-drink wars

By Reuters
Posted Dec. 13, 2010 at 5:14 p.m.

The soft drink makers who brought you the “cola wars” are gearing up to fight on another battlefield, where the secret weapons are sweeteners and “flavor enhancers.”

John Sicher, editor of trade publication Beverage Digest calls it the “ingredient war.”

The new generation of low-calorie soft drinks will contain a sophisticated mix of natural and artificial sweeteners and ingredients to balance them, industry executives said Monday.

PepsiCo Inc., Coca-Cola Co. and Dr Pepper Snapple Group Inc. are experimenting with natural, low-calorie sweeteners and so-called flavor enhancers, executives said at a conference hosted by Beverage Digest.

Pepsi is “very close” to launching new products that use a mix of sweeteners and flavor modifiers to make low-calorie drinks taste better than ever, said Chief Executive Indra Nooyi.

“We want to be out there with a product that is outstanding, not one that is just good,” Nooyi said.

“We are very close,” she said, referring to a line-up of products that she declined to identify.

Nooyi said a breakthrough would involve not only sweeteners, but ingredients to balance them. This includes making “one teaspoon of sugar taste like four” or preventing an aftertaste.

Doug Tough, chief executive of International Flavors & Fragrances Inc., said flavor enhancers are “in a word — extremely important” to the industry.

PepsiCo sells Trop 50, a lower-calorie version of Tropicana juice and a zero-calorie SoBe Lifewater drink, made with a sweetener derived from the stevia plant.

Coke sells Vitaminwater Zero with a similar sweetener.

Good-tasting, natural, low-calorie sweeteners are seen as a Holy Grail for the soft drink industry, especially as it comes under fire by critics who say sweetened drinks contribute to the obesity epidemic in the United States.

In August, PepsiCo signed a four-year deal with Senomyx Inc. to develop sweeteners. Coca-Cola signed a similar deal with Chromocell Corp. this week.

Coke North America President Sandy Douglas said Monday that the company’s plans were confidential, but its research and development labs were “as busy as anyone in the industry.” He stressed it was important to make sure ingredient innovations match up with the products’ images.

Dr Pepper Snapple Group is also experimenting with low-calorie sweeteners and modifiers.

The company’s chief executive, Larry Young, said it was easy to go 90 percent toward creating a great-tasting low-calorie product, but the final 10 percent was very difficult. He also stressed Dr Pepper would not sacrifice taste.

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