• by Karl Greenberg , March 12, 2007

Jones Soda Co., which will switch the source of its beverage sweetener from corn to sugar cane starting this month, reports a 15% revenue increase in the fourth quarter last year to $10 million, versus $8.8 million during the quarter in 2005. Jones' full-year revenue increased 16.5%.

The premium soda company, which promotes itself with the mantra "drink less soda, just better soda," has until now sweetened its sodas with corn syrup, but this month will phase in cane sugar in all of its sodas. Jones is changing its logo to include a "pure cane sugar" message to tout the switch and will launch its first-ever ad effort this spring in support, per Seth Godwin, marketing manager for the Seattle company.

"It's something we'd been talking about for some time now, and retailers had started asking for it. People are actively avoiding products that contain high fructose syrup, and we expect that to grow."

Godwin says the company will air its first TV ad in different markets in the U.S., and isn't using an ad agency. Rather, the spot is derived from a devotional video by a fan. That adheres to Jones' tactic of using photos taken by customers on its bottle labels and on its Web site.

Jones is not the only brand that will use cane sugar, but since it launched its sodas in canned form last year, it is the only canned beverage to go with cane. Godwin says the company, which concluded a contract with Target stores to sell Jones cans, will expand to other retail chains this year.

The sugar cane versus corn syrup issue is hot right now. Groups such as the International Sugar Organization and even the United Nations predict there will be an increased global supply of sugar this year, but that isn't soothing the nerves of food executives worried about the current volatility of corn syrup.

While sugar prices have dropped since record highs late in 2005, when Brazil was sending more cane sugar to ethanol plants, corn prices are now at record highs because more U.S. corn is being used to make ethanol. And sugar is still relatively expensive in the U.S.

Last week, Heinz CEO William Johnson reportedly predicted that new sweeteners will be available within three years to replace corn syrup. Johnson spoke at the Reuters Food Summit in Chicago.