According to analysts, the classification of aspartame, the artificial sweetener used in Diet Coke, as a possible carcinogen by the World Health Organization (WHO) will have only a minimal effect on Coca-Cola. This is due to the company’s extensive production scale. This assessment was made on Friday.
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The recent classification of the widely-used additive by the cancer research division of the World Health Organization in July has prompted consumers, food companies, retailers, and restaurants to weigh their options. They must now decide whether to challenge the classification or seek alternative options for the additive.
However, analysts pointed out that Coca-Cola might have an easier time transitioning to a natural sweetener compared to other companies that rely on aspartame. This is because Coca-Cola’s low-calorie offerings, which utilize aspartame, constituted approximately one-third of its total sales volume in 2022.
“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 previous times, beverage producers like Coca-Cola and PepsiCo have modified the composition of their ingredients to adhere to evolving policy shifts.
In 2012, these companies modified their cola manufacturing process by adjusting the caramel coloring to comply with the regulations of a California ballot initiative, which aimed to restrict people’s exposure to harmful chemicals.
According to Grzegorz Drozdz, a market analyst at Conotoxia Ltd, an investment firm, the transition away from aspartame could potentially impact Coca-Cola’s short-term profitability. However, Drozdz believes that the company’s extensive production history will prevent a significant decline in its long-term growth.
CFRA Research stated that PepsiCo could gain a competitive advantage over its rival, Coca-Cola, as it had already transitioned from aspartame to a combination of sucralose and acesulfame potassium. This move positions PepsiCo favorably compared to Coca-Cola in the ongoing shift away from aspartame.
In 2015, PepsiCo initially removed the additive aspartame from certain diet soda products in the United States. However, they reintroduced it in some products the following year. Then, in 2020, PepsiCo once again eliminated aspartame from their offerings.
