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The World Health Organization reaffirmed its recommended intake of aspartame Thursday, but the agency’s classification of the sweetener as a possible carcinogen could still scare diet soda drinkers and lead to new drink combinations.
Soda consumption has declined over the past two decades as consumers have shifted to drinking more water or choosing drinks with less sugar. However, diet soft drinks have been a bright spot for this category in recent years.
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Although full-calorie options still dominate the soft drink segment, diet soft drinks now account for more than a quarter of sales. coca cola And PepsiCo Bets on sugar-free versions of the soda of the same name are paying off for both companies. Diet Coke, Coca-Cola Zero, Pepsi Zero Sugar, and Diet Mountain Dew all contain aspartame.
Thursday, the International Agency for Research on Cancer, an agency of the World Health Organization, identified a possible link between aspartame and a type of liver cancer called hepatocellular carcinoma. WHO officials said more research is needed on the possible link.
A separate body, the Joint Expert Committee on Food Additives, said in its own report that the acceptable daily intake of the sweetener is less than 40 milligrams per kilogram of body weight, reaffirming previous recommendations. For most adults, that means drinking fewer than nine to 14 cans of diet soda each day.
While the findings about possible links to cancer may not deter consumers who drink less diet soda, the advertising could hurt sales at least temporarily.
Diet soda is at least 50% more popular with high-income consumers than it is with low-income people, according to TD Cowen data. TD Coin analyst Vivian Azer wrote in a research note last week that these consumers may be concerned by the WHO report.
The biggest danger for soft drink makers is the amount of attention the advertisement gets. CFRA analyst Garrett Nelson wrote in a June 29 note that the news could hurt sales volumes of reduced-calorie soft drinks if enough consumers see the headlines.
Similarly, Wedbush analyst Gerald Pascarelli told CNBC that he thinks the report could affect sales in this category. But the decline may not last long.
“These companies are quick to pivot and do what’s necessary to maintain momentum for their brands, and we think they will do the same,” he said.
Manufacturers who use aspartame in their food and beverages should consider making their products without the sweetener, said Dr Francesco Branca, WHO’s head of nutrition and food safety.
But PepsiCo CFO Hugh Johnston said Reuters on Thursday that the company had no plans to change its use of aspartame. He added that the company does not include the sweetener in much of its portfolio.
Aspartame was used in Diet Pepsi until 2015, when the company modified the formula. After a backlash from customers, PepsiCo brought it back a year later. But the change was short-lived — the beverage giant eliminated aspartame in Diet Pepsi in 2020. It still uses it in Pepsi Zero Sugar.
Coca-Cola faces greater risk of losing sales due to aspartame concerns, according to CFRA’s Nelson. The beverage giant currently uses the sweetener in both Diet Coke and Coke Zero, but could replace it with another, such as stevia, in the future.
However, Edward Jones analyst Brittany Quattrocchi said she doesn’t expect a huge hit with diet soda sales.
“Consumers may trade in various sugar-free offerings, but this is not the first type of food or beverage product to be labeled as a carcinogen,” she said.
For example, IARC classified red meat as a probable carcinogen in 2018.
The makers of diet soft drinks aren’t worried about losing sales just yet. The American Beverage Association, which lobbies on behalf of Coca-Cola, PepsiCo, and Stylish Dr. PepperTake the WHO declaration as further confirmation of the safety of sweeteners.
Kevin Kane, interim CEO of ABA, said: “With more than 40 years of science and this definitive conclusion from the World Health Organization, consumers can proceed with confidence that aspartame is a safe choice, especially for people looking to reduce sugar and calories in their diets. “. a permit.
Besides diet soft drinks, aspartame can also be found in a variety of foods, including breakfast cereals, 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.
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