Slow Start for Soda Industry's Push to Cut Calories
November 22 2016 - 1:29PM
Dow Jones News
By Mike Esterl and Jennifer Maloney
A pledge by the soft-drink industry to cut beverage calories in
the American diet by 20% over a decade is off to a rocky start.
Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group Inc. set
the goal in late 2014 amid rising obesity and diabetes concerns,
vowing to steer more consumers to bottled water, low-calorie drinks
and smaller package sizes.
But U.S. beverage calories per person declined only 0.2% in
2015, a slower rate of decrease than in earlier years, according to
a study published Tuesday that was funded by the American Beverage
Association, an industry group. "Calorie reduction momentum has
stalled," according to the report.
The Food and Drug Administration recommends limiting daily
intake of added sugar to about 12 teaspoons or 200 calories -- less
than in a 20-ounce bottle of regular Coke or Pepsi -- and companies
need to list on packaging how many grams of caloric sweeteners they
add to foods and beverages by 2018.
Daily per capita beverage calories inched down 0.4 to 198.7 in
2015, well above the industry's 2025 goal of 159.2 calories,
according to the report. The 0.2% reduction represents a slowdown
from the previous decade, when calories from beverages were
declining roughly 1% a year on average.
The report found that consumers shifting to bottled water
previously drank zero-calorie soft drinks, not full-calorie
sodas.
"Changing behavior isn't easy," a PepsiCo spokesman said.
Coca-Cola referred questions to the industry group.
"We're trying to figure out what engages people," said Susan
Neely, chief executive of the American Beverage Association. "How
do you change their buying patterns?"'
The group said it still expects to meet its calorie-reduction
target by 2025 as it continues to ramp up marketing and new retail
strategies.
The results come at a sensitive time for the industry, which is
battling calls for special taxes on sweetened drinks. Earlier this
month Chicago's Cook County approved a penny-per-ounce levy,
joining Philadelphia, San Francisco and four smaller U.S. cities
that have passed similar measures since 2014.
On Tuesday, both PepsiCo and Dr Pepper struck deals to acquire
upstarts that promote drinks that are marketed as healthier and
more natural. Dr Pepper agreed to pay $1.7 billion for Bai Brands,
which makes low-calorie coffee-fruit drinks. PepsiCo is paying a
bit more than $200 million for kombucha maker KeVita, according to
people familiar with the matter.
Americans are drinking more water -- so much so that bottled
water consumption could surpass soda for the first time this year,
according to industry watchers. But while U.S. water consumption
surged 7.1% in 2015, that didn't result in reductions in caloric
beverages.
Consumption of full-calorie sports drinks, energy drinks and
ready-to-drink tea and coffee each increased 7% or more in 2015,
according to Tuesday's report. Consumption of full-calorie sodas
fell 0.9% last year, while low- and no-calorie soda tumbled 5.9% as
more consumers avoid artificial, zero-calorie sweeteners such as
aspartame.
Companies continue to experiment with in-store marketing
techniques in places like Bedford Stuyvesant, a low-income
neighborhood in Brooklyn, N.Y., where industry representatives say
consumers weigh price more than calories.
During a tour of an Ideal Food Basket grocery store organized by
the ABA, a display shelf on the end of an aisle featured
zero-calorie sodas at eye level, including 2-liter bottles of
Sprite Zero and Diet Dr Pepper. A stand-alone holiday display
featured eight-packs of 7.5-ounce "mini cans" of Coke, Diet Coke
and Coke Zero with coupons offering a dollar off the purchase of
two packs.
At Utica Express Deli, a bodega with a torn awning, signs inside
and outside the store said: "Balance What You Eat, Drink & Do."
Inside, one cooler door was decked with orange-colored 99-cent
stickers. At eye level were 16.9-ounce bottles of Pepsi, Schweppes
Ginger Ale and Mountain Dew -- smaller-portion alternatives to the
more popular 20-ounce versions.
Koast Lewis, a 28-year-old neighborhood resident, pulled out a
16.9-ounce ginger ale and bought it. He said he hadn't noticed the
signs encouraging moderation.
"This is the only soda I like," he said. "None of that
matters."
Write to Mike Esterl at mike.esterl@wsj.com and Jennifer Maloney
at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
November 22, 2016 13:14 ET (18:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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