Soda industry’s push to cut calories off to slow start

MIKE ESTERL, JENNIFER MALONEY
November 24, 2016
The Wall Street Journal
A pledge by the soft-drink industry to cut beverage calories in the American diet by 20 per cent over a decade is off to a rocky start.
Coca-Cola, PepsiCo and Dr Pepper Snapple Group 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 US beverage calories per person declined only 0.2 per cent in 2015, a slower rate of decrease than in earlier years, according to a new study 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 (600ml) 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 per cent reduction represents a slowdown from the previous decade, when calories from beverages were declining roughly 1 per cent a year on average.
The report found that consumers shifting to bottled water previously drank zero-calorie soft drinks, not full-calorie sodas.
“Changing behaviour 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 expected to meet its calorie-reduction target by 2025 as it continued 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 US cities that have passed similar measures since 2014.
This week, 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 $US1.7 billion ($2.3bn) for Bai Brands, which makes low-­calorie coffee-fruit drinks.
PepsiCo is paying a bit more than $US200 million for kombucha maker KeVita.
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 US water consumption surged 7.1 per cent 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 per cent or more in 2015, according to the latest report. Consumption of full-calorie sodas fell 0.9 per cent last year, while low and no-calorie soda tumbled 5.9 per cent as more consumers avoid artificial, zero-­calorie sweeteners such as aspartame.
Companies continue to experiment with in-store marketing techniques in places such as Bedford Stuyvesant, a low-income neighbourhood in Brooklyn, New York, where consumers weigh price more than calories.
During a tour of an Ideal Food Basket grocery store organised by the ABA, a display shelf on the end of an aisle featured zero-calorie sodas at eye level, including 2-litre bottles of Sprite Zero and Diet Dr Pepper. A stand-alone holiday display featured eight-packs of “mini cans’’ of Coke, Diet Coke and Coke Zero with coupons offering a dollar off the purchase of two packs.
At Utica Express Deli, signs inside and outside the store said: “Balance What You Eat, Drink & Do.” Inside, one cooler door was decked with orange-coloured US99c 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 local resident, pulled out a bottle of 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.”