Australia's biggest soft drink maker, Coca-Cola Amatil, says it's cut back its sugar use.
That comes on top of a report from Platinum Capital this week which said investment attitudes towards sugar were changing in a similar way to attitudes towards tobacco in the 1960s.
It comes as the world's biggest soft drink makers have experienced a drop in cola sales in the U.S.—the original super-size me nation—for the ninth straight year last year alone as consumers seek healthier alternatives to combat obesity and diseases such as diabetes.
Coca-Cola Amatil (CCA) chief executive Alison Watkins told Fairfax Media the company had introduced more lower kilojoule options as well as smaller portion sizes to help crush obesity.
"Today, around one quarter of our portfolio is low or no kilojoule and we offer a low kilojoule option for all our top selling brands," Ms Watkins said.
Last year, CCA cut its sugar buying by 3 percent. In the same period, soft drink sales rose by the same number, a company spokeswoman said.
CCA also defended the prices its charges for its soft drinks after Platinum analyst Constance Zhang accused the company of not passing cost savings on to consumers.
CCA charges the same amount for its diet and non-diet drinks, despite artificial sweeteners costing much less than the sugar equivalent.
The CCA spokeswoman said ingredient costs were a small part of the overall cost of the product, paling in comparison to packaging, manufacturing, distribution and labour costs.
She said the company also charged the same for non-diet and diet drinks so "consumers get to choose the product that is right for them uninfluenced by price".
Among CCA's low-kilojoule drinks is Coca-Cola Life, which the company launched in April. It contains a blend of stevia, a natural sweetener, and cane sugar to deliver 35 percent less kilojoules than regular Coke.
Stevia has been hailed a game-changer in the soft drink industry because it is derived from plant leaves and compounds, which are claimed to be 300 times sweeter than sugar but without the calories.
The plant has been used as a sweetener in Japan, China and Brazil for more than 40 years, and the U.S. approved stevia for commercial use seven years ago.
But stevia companies are yet to enjoy the blue-chip status of their bigger soft drink customers.
Shares in Nasdaq-listed Senomyx have almost halved since February last year, plunging from $US12.05 to $US6.31. Meanwhile California-based Stevia First has skidded from a high of $US3.24 a share in March 2012 to US35¢.
Globally, the sweetener market is estimated to be $US68.1 billion in 2014 and expected to reach at US$95.9 billion by 2020. Whereas, the stevia market is estimated to be worth $US347.0 million and expected to reach $US565.2 million by 2020.
Soft drink manufactures are still using sugar in the new stevia-based products to disguise the herb's bitter aftertaste.
Morgans analyst Belinda Moore said CCA's new management was doing a "solid job" in turning around the business through cost-cutting and product innovation.
"Structural headwinds remain," said Ms Moore, citing a shift towards healthier options and pressure from supermarkets.
"[But] CCA has a strong balance sheet and generates strong free cash flow which can fund its growth opportunities, an attractive dividend yield and possibly capital management overtime."
Source: www.smh.com.au