The World Health Organization reaffirmed its recommended intake of aspartame on Thursday, but the agency’s classification of the sweetener as a possible carcinogen could still scare off diet soda drinkers and prompt new beverage formulations.
Soda consumption has declined over the past two decades as consumers have switched to drinking more water or opting for beverages with less sugar. Diet soda, however, has been the category’s bright spot in recent years.
Related investment news
While full-calorie drinks still dominate the soda market, diet sodas now account for more than a quarter of sales. coca cola and Pepsi The bet on a zero-sugar version of the eponymous soda paid off for both companies. Diet Coke, Coke Zero, Pepsi Zero Sugar, and Diet Mountain Dew all contain aspartame.
On Thursday, the International Agency for Research on Cancer, part of the World Health Organization, found a possible link between aspartame and a type of liver cancer called hepatocellular carcinoma. WHO officials say more research is needed on potential links.
In a statement, the FDA said it disagreed with IARC’s conclusions and that its own scientists had no safety concerns about aspartame.
“FDA scientists reviewed the scientific information contained in IARC’s first review in 2021 and found significant deficiencies in the studies that IARC relied on,” the FDA said.
The JECFA, an independent body linked to the World Health Organization and the Food and Agriculture Organization of the United Nations, said in a report on Thursday that the acceptable daily intake of sweeteners is less than 40 milligrams per kilogram of body weight, reaffirming this. a little. previous suggestion. For most adults, that means drinking fewer than 9 to 14 cans of diet soda per day.
While the discovery of a possible link to cancer likely won’t deter consumers from drinking small amounts of diet soda, the news could hurt sales, at least temporarily.
According to TD Cowen, diet soda is at least 50 percent more popular among high-income consumers than low-income consumers. Those consumers may be concerned by the World Health Organization report, TD Cowen analyst Vivien Azer wrote in a research note last week.
The biggest risk for the soda maker is how much attention the announcement gets. If enough consumers see the headlines, the news could hurt sales of diet soda, CFRA analyst Garrett Nelson wrote in a June 29 note.
Likewise, Wedbush analyst Gerald Pascarelli told CNBC that he thinks the report could impact sales in the category. But the slide may not last for long.
“These companies are quick to pivot and do what is necessary to maintain the momentum of their brands, and we suspect they will do the same,” he said.
Manufacturers who use aspartame in food and beverages should consider making products without the sweetener, said Dr. Francisco Branca, head of the World Health Organization’s nutrition and food safety department.
But PepsiCo chief financial officer Hugh Johnston told Reuters On Thursday, the company had no plans to change the use of aspartame. The sweetener is not included in most of the company’s product portfolio, he added.
Aspartame was used in Diet Pepsi until the company changed its formula in 2015. Pepsi relaunched it a year later after a backlash from customers. But the change didn’t last long — the beverage giant dropped aspartame from Diet Pepsi in 2020. It still uses it in Pepsi Zero Sugar.
Coca-Cola is at greater risk of lost sales because of aspartame concerns, CFRA’s Nielsen said. The beverage giant currently uses the sweetener in both its Diet Coke and Coke Zero, but may switch it to another sweetener, such as stevia, in the future.
Even so, Edward Jones analyst Brittany Quatrochi said she doesn’t expect a major hit to diet soda sales.
“Consumers may be buying different sugar-free products, but this is not the first food or drink product to be labeled as a carcinogen,” she said.
For example, the International Agency for Research on Cancer (IARC) listed red meat as a probable carcinogen in 2018.
Diet soda makers aren’t bothering about lost sales just yet.The American Beverage Association represents Coca-Cola, PepsiCo and clean dr peppersee the World Health Organization announcement as further confirmation of the safety of sweeteners.
Kevin Keane, interim chief executive of the ABA, said: “With more than 40 years of science and this clear conclusion from the World Health Organization, consumers can go forward with confidence that aspartame is a safe options, especially for those looking to reduce sugar and calories in their diets,” a statement said.
Aspartame is found in a variety of foods besides diet soda, including breakfast cereal, chewing gum and ice cream. It is widely used as a sugar substitute because it is 200 times sweeter, which means it can be used in much lower concentrations.