Coca-Cola, PepsiCo sales likely to withstand WHO aspartame cancer ruling

The beverage giants have large stakes in the sugar-free space with popular offerings such as Coke Zero, Diet Coke, Pepsi Zero Sugar and Diet Pepsi.

The World Health Organization’s announcement last week that aspartame is “possibly carcinogenic” is unlikely to meaningfully impact sales at Coca-Cola and PepsiCo or cause the beverage companies to suddenly abandon the hotly debated ingredient in favor of another sugar alternative.

“We just don’t really see a big impact,” said Brittany Quatrochi, an analyst at Edward Jones, who covers PepsiCo and Coca-Cola. “I just don’t think that [the WHO’s statement is] necessarily going to alter the consumer perspective when we’re already seeing soda and many of the other types of products that contain aspartame viewed as unhealthy.” 

Quatrochi added that red and processed meat, as well as alcohol, are cited by the WHO as having a stronger correlation with cancer than aspartame, and many consumers continue to partake in those offerings.

Diet sodas have been a bright spot for Coca-Cola and PepsiCo in an otherwise sour market where regular cola sales have plunged as consumers cut back on their sugar intake. Currently, diet sodas make up 27% of the carbonated soft drink market, according to Statista. 

The cola giants have large stakes in the sugar-free space with Coke Zero, Diet Coke, Pepsi Zero Sugar and Diet Pepsi — all four of which contain aspartame.

The sweetener has drawn its share of critics who have noted reported links between the sugar replacement and cancer and other illness.

But the lion’s share of studies and health regulatory agencies around the world, including the FDA, have backed aspartame’s safety and cited a rigorous amount of testing for the food additive.

The FDA reaffirmed its support of aspartame last week while criticizing the studies used by WHO’s International Agency for Research on Cancer that declared the potential connection to cancer.

A separate group at WHO, the Joint Expert Committee on Food Additives (JECFA), said it considered the cancer risk and concluded that “the evidence of an association between aspartame consumption and cancer in humans is not convincing.”

Little incentive to make a change

Aspartame is used in about 6,000 products globally, including chewing gum, confections, gelatins, dessert mixes, puddings and yogurt. Some of the other more well-known products using aspartame include Crystal Light, Extra gum, some Snapple drinks and sugar-free Jell-O.

Hank Cardello, a food industry expert at Georgetown University’s McDonough School of Business who was the first brand director for Diet Coke in 1983, said when aspartame was introduced it was a “breakthrough ingredient.” Today, aspartame is joined by stevia, sucralose and Acesulfame K, among others, giving food and beverage companies more sweetener choices.

Cardello noted that beverage companies are always on the lookout for a cheaper, safer and more sugar-like sweetener option. He said that for now, companies who use aspartame are unlikely to make any meaningful move away from it.

One reason is that the WHO data connecting the ingredient to cancer wasn’t convincing enough to many credible scientists to bring on such a change, Cardello said.

In addition, certain sweeteners have attributes that make them ideal for a certain product, like their taste, or how they impact acidity or processing temperature. It is possible to switch away from aspartame and substitute other sweeteners, but it may impact a product’s taste profile or cost.

Finally, the fact that the FDA, WHO’s JECFA and other respected groups back the safety of aspartame, coupled with decades of scientific data, gives soda makers some invaluable support. “They have the biggest scientific bodies telling them that things are okay,” Cardello said.

A PepsiCo official told Reuters shortly before the WHO announcement that it does not intend to change its use of aspartame. Coca-Cola did not respond to a request for comment.

Garrett Nelson, an analyst with CFRA, said in a research note ahead of the WHO announcement that the expected use of the words “possibly carcinogenic” could cause “beverage companies such as [Coca-Cola] both to challenge the findings and swap to substitute sweeteners (stevia) in their recipes.”

He went on to add that the headlines could have a negative impact on sales volumes of lower-calorie sodas depending on how much attention the WHO news receives with consumers, with Coca-Cola facing a larger hit.

Still, even if change doesn’t take place in the near term, the WHO decision will cast a renewed spotlight on aspartame that is unlikely to abate anytime soon. Marion Nestle, a former professor of nutrition, food studies and public health at New York University, said more smaller food and beverage companies are adding “no aspartame labels” to their products to appeal to health-conscious consumers. 

“The proportion of consumers who care about such things may not be a majority, but the ‘no aspartame’ labels on food products tells you that not using it is a selling point,” she said. “All would be better off getting rid of it.”

Source: Fooddive