PepsiCo Inc has set a target for reducing the amount of sugar in its soft drinks around the world as part of a suite of goals aimed at tackling problems ranging from obesity to climate change.
The New York-based company was yesterday to announce that by 2025, at least two-thirds of its drinks would have 100 calories or fewer from added sugar per 355ml serving, up from about 40 percent now.
The move, which the company plans to achieve by introducing more zero and low-calorie drinks and reformulating existing drinks, comes as PepsiCo and rival Coca-Cola come under increasing pressure from health experts and governments who blame them for fueling epidemics of obesity and diabetes.
PepsiCo said the new global target is more ambitious than its previous goal of reducing sugar by 25 percent in certain drinks in certain markets by 2020.
“The science has evolved,” PepsiCo chief scientific officer of research and development Mehmood Khan said.
He gave an example of new flavor ingredients that require less sweetening, saying: “It’s not just about sweeteners, it’s about understanding the flavor ingredients and having proprietary knowledge and access to them.”
The WHO this month recommended taxes on sugary drinks, as France and Mexico have done, to curb consumption and improve health.
The soft drinks industry opposes such taxes.
Despite its name, PepsiCo generates only 12 percent of its US$63 billion in annual revenue from its famous cola brand.
It makes 25 percent from carbonated soft drinks, such as Mountain Dew, with the rest coming from waters and juices, including the Tropicana brand, as well as snacks and dips, such as hummus and guacamole.
Its 2025 goals also include targets for lowering sodium and saturated fat.
“These are good steps, but when we have an obesity crisis, I think there is more that we can be doing,” said Mindy Lubber, president of nonprofit organization Ceres, which pushes companies and investors to take action on sustainability.
“If a food and beverage company is not looking at nutrition, they are not looking at the direction the world is going in,” she said.
Coke has said that by 2020 it would offer low-calorie or no-calorie options in every market as part of its sustainability goals.
PepsiCo is building on goals set out 10 years ago, which targeted nutritional, environmental and social improvements.
Khan said there has also been financial progress.
He said the company has saved US$600 million over the past five years from reduced water, packaging and energy use, as well as a reduction in waste.
He added that, over the past decade, average returns on investments in this area have been better than the cost of capital.
Khan expects similar returns, which might be good news for investors, who generally do not base investment decisions on sustainability.
“It might not be the driving factor, but it might be a filter,” Morningstar analyst Philip Gorham said.
Other targets include a 15 percent improvement in the water efficiency of PepsiCo’s direct agricultural supply chain in water-stressed areas by 2025 and a 20 percent drop in greenhouse gas emissions across its supply chain by 2030.
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