Producers cheer return of sugar-sweetened drinks, enjoy profitable year

Beverage companies move away from high fructose corn syrup

By DAVE WILKINS
Capital Press

U.S. sugar farmers hope the recent move by some beverage makers back to sugar becomes permanent.

Several beverage makers, including Pepsi, Dr Pepper and Snapple have rolled out products that contain sugar as the primary sweetener, replacing high fructose corn syrup.

Pepsi first test marketed Pepsi Throwback in March 2009. The company began a second national, eight-week test of the sugar-sweetened beverage on Dec. 28.

Throwback's label says it will be available for "a limited time only," but the sugar industry hopes it will find a permanent place on store shelves. The Throwback campaign, for both Pepsi and Mountain Dew, is currently scheduled to end Feb. 22.

"Obviously it was favorable enough the first time around that Pepsi decided to do it again," said Andy Briscoe, CEO of the Sugar Association.

Pepsi isn't the only beverage maker making the switch.

Dr Pepper recently released Heritage Dr Pepper and Gatorade has made a similar announcement to move back to sugar. Snapple and Jones Soda have likewise moved away from high fructose corn syrup.

Briscoe updated sugar beet growers on the trend during the Snake River Sugar Co. annual meeting Thursday, Jan. 7, in Twin Falls, Idaho.

In a separate interview, Briscoe said the switch to sugar has been driven by economics, product availability and consumers' preference for natural, good-tasting ingredients.

Sugar is the only sweetener that's all natural, has only 15 calories per teaspoon and has safely been used for more than 2,000 years, he said.

"Plus, it's a sweetener you can pronounce," Briscoe said.

Growers are excited about the move toward more sugar-sweetened beverages.

"Hopefully it will continue. We're biased, but we think it tastes better," said Mark Duffin, executive director of the Idaho Sugarbeet Growers Association.

The price of high fructose corn syrup has increased as more and more of the nation's corn crop has been diverted to ethanol production. Typically, high fructose corn syrup costs about 20 to 40 percent less than wholesale refined sugar, but since early 2008 it's been about the same price, according to USDA's Economic Research Service.

Sugar is still the No. 1 sweetener in the United States, with a 38 percent market share, Briscoe said.

High fructose corn syrup is second with 31 percent, and it's tracking downward.

High fructose corn syrup deliveries have dropped 15 percent, or about 800,000 tons, since 2002, he said.

It was introduced into the U.S. soft drink market in the 1970s and '80s. At the time, it was about half the price of sugar.

"It was strictly an economic decision by Coke and Pepsi," Briscoe said. "Consumers went along with it, but now they're being more demanding in taste."

Other countries, including Mexico, most of Latin American and Europe, stuck with sugar, Briscoe said.

The switch back to sugar in the United States comes at a profitable time for many producers.

Since early 2008, U.S. wholesale refined sugar prices have increased roughly 40 percent, according to USDA.

"We've been really blessed with strong demand," Briscoe said. "It looks like 2010 is going to be just as strong, if not stronger than 2009."

U.S. sugar beet growers' widespread use of genetically modified Roundup Ready varieties hasn't had any discernible effect on demand.

"Sugar is sugar," Briscoe said.