PepsiCo yesterday announced plans to further reduce the amount of added sugars, saturated fat and sodium levels in its product lineups, as well as environmental and social-impact initiatives in an “agenda designed to foster continued business growth in a way that responds to changing consumer and societal needs.”
Among the goals for 2025:
“It's a big commitment — PepsiCo sells beverages in about 180 countries worldwide and still makes well over $1 billion annually from the sale of its flagship sugar-based Pepsi drink,” Jeff Daniels writes for CNBC. “… At the same time, PepsiCo has been pushing its low-calorie offerings, including a relaunched Diet Pepsi with aspartame. And this summer it announced a new brand, Pepsi Zero Sugar, replacing Pepsi Max.”
“Technology breakthroughs right now are resulting in better-tasting colas, almost as good as the full-sugar colas, but with lower calories,” PepsiCo chairman and CEO Indra Nooyi tells CNBC’s Sara Eisen in an interview. "So we're now faced with [an] interesting opportunity to step the consumer down to lower sweetness levels."
“The new goals replace 2020 targets that PepsiCo set in 2009. Added sugars rose 4% between 2006 and 2015, compared with the company’s 25% reduction target for 2020,” writes Mike Esterl in the Wall Street Journal. “PepsiCo has cut sodium by 12% and saturated fat by 3% over the same period. It said in 2009 it wanted to cut sodium and saturated fat by 25% and 15%, respectively.”
PepsiCo says the new target “is more ambitious than its previous goal,” Reuters’ Martinne Geller reports.
“The science has evolved,” Mehmood Khan, PepsiCo's chief scientific officer of research and development, tells Geller while citing new flavor ingredients that require less sweetening. “It's not just about sweeteners, it's about understanding the flavor ingredients and having proprietary knowledge and access to them.” Khan says.
“I think Pepsi's announcement is a very meaningful commitment,” Dr. William Dietz, a preventive health expert at George Washington University, tells NPR’s Allison Aubrey. “We know that sugar intake is an important contributor to obesity, and … soft drinks and soda and juices are a major source of sugar calories.”
PepsiCo’s goals are “informed by the latest dietary guidelines of the World Health Organization and other authorities,” it says. WHO recommends adults and children reduce their daily intake of free sugars to less than 10% of their total energy intake and says further reduction to below 5% — 6 teaspoons — per day would provide additional health benefits.
Earlier this month, WHO recommended implementing taxes on sugary drinks to curb consumption, Reuters’ Geller reports. At the time, it referenced a report that found that “fiscal policies that lead to at least a 20% increase in the retail price of sugary drinks would result in proportional reductions in consumption of such products.”
The soft drink industry is doing its utmost to resist taxes, of course, saying it’s on top of the situation with new and improved products.
“PepsiCo is one of several large food and beverage companies, including Nestlé SA and Coca-Cola Co., that have been moving to overhaul their portfolio and offer healthier products amid shifting consumer tastes even as many shoppers continue stocking up on longtime staples like candy, salty snacks and sugary sodas,” the WSJ’s Esterl points out.
“There has also been increasing concern about the use of artificial sweeteners and other chemicals, leading Pepsi and its rival, Coca-Cola, to roll out new drinks and revise older versions to keep their core businesses thriving,” observes Charisse Jones in USA Today.
“The first 10 years of PepsiCo's Performance with Purpose journey have demonstrated what is possible when a company does well by also doing good,” CEO Nooyi says in a statement. “PepsiCo's journey is far from complete ….”
The company elaborates on environment and social goals under the umbrellas of “reduc[ing] the environmental footprint of the food system” and “empower[ing] people and social development across its operations, supply chain and communities.”
And, when all is said and positioned, it’s all about top line growth.
“Companies like ours have to take the initiative and change our portfolios, and change the way we operate, not as a corporate social responsibility but more because that’s the way we can remain successful going forward,” Nooyi tells CNBC’s Eisen.