Soda companies racing for a new sweet spot

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Coca-Cola, based in Atlanta, says it’s currently testing additional drinks that use stevia and other natural sweeteners but declined to give details. The tests are part of the ongoing “home-use tests” the company conducts, in which consumers may be given a six-pack of a new product to try over the course of a week.

To accelerate the pace of such trials, Coca-Cola two years ago dedicated a production line at one of its plants solely to churning out test beverages. But taste isn’t the only consideration for the world’s biggest soda maker.

“Some of the very exciting (sweeteners) we’re playing with are really small in terms of production and planting, and they need to be nurtured,” says Katie Bayne, president of Coca-Cola’s North American soda business.

Coca-Cola also is testing versions of its Sprite and Fanta that use stevia in Atlanta, Detroit, Louisville, Ky. and Memphis, Tenn. The drinks have about half the calories of regular Sprite and Fanta (70 per can, instead of 140 or 160, respectively). But the “Select” drinks fall short of the ideal because they have sugar.

PepsiCo, based in Purchase, N.Y., is also on the hunt for new drinks that use natural, no-calorie sweeteners. In 2010, the company entered a $62 million, four-year deal with food flavor company Senomyx Inc. to develop natural sweeteners and “taste enhancers” that can intensify sweetness. Coca-Cola also previously had an eight-year contract with Senomyx; neither of the partnerships has yet produced any products for commercial use.

Dr Pepper Snapple Group, the nation’s third-largest soda maker, also is searching for the right combination. The company’s line of flavored sodas, such as Sunkist and A&W Root Beer, may make it easier to mask the taste of natural sweeteners like stevia than with colas.

At a beverage industry conference earlier this year, Dr Pepper’s Chief Financial Officer Marty Ellen said he thinks a “sweetener breakthrough” is achievable in the next few years.

Recreating the exact taste of extremely valuable brands such as Coke and Pepsi is a high-stakes game and companies don’t want to rush any drinks to the market. But making a natural cola that doesn’t have any calories isn’t impossible. Smaller companies such as Zevia, based in Culver City, Calif., already make such colas using stevia.

Zevia is now sold in 10,500 locations _ including Kroger and Whole Foods _ up from just 850 locations four years ago. CEO Paddy Spence doesn’t think Coke and Pepsi’s efforts to come up with their own zero-calorie drinks will threaten his company.

“When consumers see a brand all of a sudden with different positioning, they see right through that,” Spence said. “They’ll say `you’re a sugar soda company that has a couple different stevia products.’”

Still, considering their enormous resources, it’s likely that soda companies will eventually find a way to make natural drinks with no calories that taste good, says Mike Jacobson of the Center for Science in the Public Interest.

“If you look 10 years ahead, we’re going to see a different marketplace for sodas,” he said.

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__AP Writer Jason Keyser contributed from Chicago.

Follow Candice Choi on http://www.twitter.com/candicechoi

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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