Coca-Cola will only see a limited impact if the world health agency classifies the artificial sweetener used in its Diet Coke, aspartame, as a possible carcinogen, thanks to its scale of production, analysts said on Friday 14 July.
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Such a classification of the popular additive in July by the World Health Organization's cancer research arm could cause consumers, food companies, retailers and restaurants to decide whether to fight back or find alternatives.
But for Coca-Cola, whose low-calorie products accounted for a third of its total volumes sold in 2022, analysts said switching to a natural sweetener could be easier than many other companies that use aspartame.
"Coca-Cola has one of the best production and distribution systems globally... who have successfully navigated plenty of hurdles in the past, like sugar taxes and reformulations associated with that," said Charlie Higgs, an associate partner at Redburn Ltd, a consumer staples research firm.
In the past, beverage makers like Coca-Cola and PepsiCo have tweaked their ingredient composition to comply with evolving policy changes.
The companies had in 2012 altered their manufacturing process of the caramel coloring in their colas to meet the requirements of a California ballot initiative aiming to limit people's exposure to toxic chemicals.
Market analyst Grzegorz Drozdz at investment firm Conotoxia Ltd said the shift from aspartame could hit the short-term profitability of Coca-Cola, but does not see a steep decline in its long-term growth due to its production history.
However, PepsiCo could get an edge over its rival as it had moved away from aspartame to a blend of sucralose and acesulfame potassium earlier, CFRA Research said.
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The company first replaced the additive from some US diet sodas in 2015, but brought it back in some products a year later.
PepsiCo Says No Plans To Change Portfolio As WHO Set To Warn On Aspartame Sweeteners
The above news followed news that PepsiCo does not intend to change its product portfolio following a report that artificial sweetener aspartame was set to be declared a possible carcinogen, chief financial officer Hugh Johnston told Reuters on Thursday 13 July.
Aspartame will be listed as "possibly carcinogenic to humans" on 14 July for the first time by the International Agency for Research on Cancer (IARC), the World Health Organization's (WHO) cancer research arm, Reuters reported in June.
The ingredient is one of the world's most widely used artificial sweeteners, found in products ranging from Coca-Cola's Diet Coke to Mars' Extra sugar-free chewing gum.
"We don't have any plans to change the product portfolio relative to where we are right now with aspartame," Johnston said.
Aspartame, discovered in 1965 by American chemist James Schlatter, is about 200 times sweeter than regular table sugar.
Johnston noted there had been over 100 studies on aspartame, which had concluded it is safe as an ingredient.
"By far the weight of the scientific evidence suggests that aspartame is safe as an ingredient, and obviously has the benefit of being zero calorie," he added.
PepsiCo was one of the companies that used the sweetener in its U.S. diet sodas but removed it in 2015. The company brought it back a year later.
Johnston said, "It is probably in a few products, but it's not a huge part."
The beverage giant, which raised its annual revenue and profit forecasts earlier on Thursday, said it could easily shift to using other kinds of sweeteners if the need ever arises.
"The only thing to keep in mind is aspartame is one sweetener. There are lots of different sweeteners we use and candidly it's relatively easy for us to shift sweeteners if it became something that was important to do," Johnston added.
Read More: Coca-Cola HBC Expects Annual Profit Growth At Top-End Of Forecast
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