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PepsiCo CEO promises ‘disruptive’ innovation: Novel natural sweeteners, flavorings, could ‘alter the trajectory of our cola business’

3 commentsBy Elaine WATSON , 14-Feb-2013
Last updated on 15-Feb-2013 at 11:49 GMT2013-02-15T11:49:36Z

PepsiCo promises disruptive’ innovation in cola via new sweetener

PepsiCo says it is exploring novel natural sweeteners and flavorings that will bring “disruptive innovation” to the cola market.

Speaking to analysts on the firm’s Q4 earnings call, chief executive Indra Nooyi said: “So what’s our approach in colas? Simply put, we’d like to lead disruptive innovation. The industry has not had truly meaningful innovation in colas since the introduction of Diet in 1960s.

“Our research indicates that consumers still love bubbles. They love the cola taste, but would like to lower their caloric intake without the taste of artificial sweeteners. So… we’ve been developing new natural sweeteners and flavoring aimed at reducing calories with no compromise on taste.”

We'd like to lead disruptive innovation

She added: “We have some promising projects that are currently going through the FDA review process that once commercialized could potentially alter the trajectory of our Cola business in a meaningful way.”

Asked by an analysts on the call how close they are to commercialization, she said: “We’re just waiting for the FDA approval and that’s not in our hands. It’s in the government’s hands. Once we get the FDA approval we’ll be launching."

The PepsiCo press office subsequently clarified her comments, however, telling FoodNavigator-USA: "While the preparation work for the review and commercialization process is underway, potential innovation has not been submitted to the FDA. 

"Once the preparation work has been successfully completed, submission will be made to the appropriate reviewing body."

Beyond stevia and monk fruit? Brazzein and monatin

But what's the sweetener in question?

Nooyi did not reveal which sweetener or flavor enhancer Pepsi is exploring, or whether it is doing so alone or in partnership with another firm such as Senomyx, with whom Pepsi has been working on a taste modifier called S617 that enhances the sweetness of sugar and high fructose corn syrup (HFCS).

While PepsiCo uses natural sweetener stevia in its Pepsi Next mid-calorie product in Australia (although not the US, where it is sweetened with HFCS, aspartame, Ace K and sucralose), its flagship Diet Pepsi product is sweetened with artificial sweeteners aspartame and ace K.

And while monk fruit extract - the other major natural high intensity sweetener available to formulators - has been gaining ground in recent months, it has not been used in any major cola launches - yet.

Meanwhile, other natural high intensity sweeteners such as brazzein (a protein derived from the berry of West African plant Pentadiplandra brazzeana Baillon) and monatin (an extract from the South African plant Sclerochiton ilicifolius) are still awaiting regulatory approval in the US.

However, the entrepreneur behind Cweet - a natural sweetener from brazzein - recently told this publication that he hopes to secure regulatory approval to sell it in the US in one to two years.

Senomyx is screening plant-derived samples in an effort to discover novel natural high-potency sweeteners

Tate & Lyle, which markets monk fruit-based sweetener Purefruit, has made no secret of its desire to find other natural high-potency sweeteners and plant-based masking agents and sweetness enhancers, while Cargill is also looking at the potential of monatin.

San Diego-based flavors innovator Senomyx is also trying to identify novel natural sweeteners.

Speaking to FoodNavigator-USA last year , corporate communications VP Gwen Rosenberg said the firm had identified a natural compound that provided a sweet taste that served as "an important taste proof of concept to validate Senomyx's approach”, although she would not say how much sweeter it was than sucrose.

She added: “Senomyx is using our proprietary technologies to screen plant-derived samples in an effort to discover novel natural high-potency sweeteners. This involves building a targeted natural-source library and using the company’s proprietary technologies to identify potential new natural sweeteners and sweet flavor ingredients.”

Givaudan on stevia: ‘Stevia still brings noticeable off-tastes compared to sugar, depending on the blend’

Monk fruit sweeteners are gaining ground as firms looks for other options beyond stevia in the natural sweetener space, although blends of steviol glycosides and monk fruit are also growing in popularity

But what's wrong with stevia?

Nothing, according to flavor giant Givaudan. But firms like to have options, and formulation challenges remain.

Although the latest blends of steviol glycosides do not have the same bitter off-notes associated with some earlier stevia extracts on the market, some still contain “noticeable off-tastes compared to sugar”, Janine van Kampen, global product manager, told us last fall.

“Most of the new stevia blends combine different steviol glycoside components to modify these bitter, licorice and lingering off-notes. Although many of these do show improved quality compared to the first Rebaudioside A extracts, there are still noticeable off-tastes compared to sugar, depending on the blend."

The temporal sweetness of monatin et al is very different compared to sugar

As for monk fruit, she said: “Luo han guo gives a nice round sweetness and not the same level of bitterness as stevia. However it gives a strong fermented, fruity character that will be perceived as an off-taste in many applications. Characterizing flavors can help balance these notes."

Asked about other natural high-intensity natural sweeteners such as monatin, osladin, brazzein, thaumatin and monellin, she said: “We found them to be very sweet, but the temporal sweetness is very different compared to sugar.”

PepsiCo: ‘Only a fifth of our North American beverage volume is full-sugar cola’

Fruit juice and coffee-based drink Mountain Dew Kickstart will launch later this month

PepsiCo, which launched ‘natural energy’ drink Mountain Dew Kickstart earlier this week, now generates almost 40% of its beverage volumes in North America from non-carbonated products such as waters and juices, while “only a fifth of our North American beverage volume is full sugar Cola”, revealed Nooyi.

“Colas have been under pressure for some time now.”

However, mid-calorie cola Pepsi Next, which contains 60% fewer calories than regular Pepsi, generated an impressive $100m in retail sales in its first year on the market, she revealed.

Q4 highlights

In the fourth quarter of 2012 (three months to Dec 29), PepsiCo posted earnings of $1.66bn, or $1.06 per share vs $1.42bn, or 89 cents per share, a year ago, ahead of analysts’ expectations.

Revenue dipped 1% to $20bn, impacted by the stronger dollar and an extra week in last year’s quarter, but still beat Wall Street’s estimate of $19.8bn.

3 comments (Comments are now closed)

door knobs and ideologues

Rationality and factual argument doesn't work with ideologues.

I was recently speaking with such a door knob about the need for her to wash her oh-so-green reusable cloth grocery bag.

As she was fighting yet another bout of violent diarrhea (caused she said by food additives), she was unwilling to even consider that her grocery bag might be an issue.

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Posted by RS
18 February 2013 | 19h562013-02-18T19:56:07Z

Ginger

So you are saying, the indispensible amino acid phenylalanine has caused the deaths of millions nad contributed to the ill health of million more. Could you provide some data to support this claim, as phenylalanine is found in virtually every single protein avialable (bar perhaps GMP).
Or are you attempting to say the unsupported health risks of aspartame are releated to its phenylalanine content. Its hard to tell with your hyperbole mixed in with other conspiracy theories.

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Posted by JC Carter
17 February 2013 | 21h532013-02-17T21:53:26Z

Pepsi innovation awaiting FDA approval.

You must be joking. The FDA is in the business of allowing poisonous artificial aweeteners and GMO seed pollution world wide. Surely you people at PepsiCo have long known that aspartame aka phenylaline is a carcinogenic poison which has claimed the lives of millions over the past few decades and contributed to the ill health of millions more.

Your company it appears did nothing to look for an alternative until now. That is if you just decided now. Attempting to appear to be a good guy in all of this innovation switch to more natural unharmful ingredients in Pepsi products. Attention, attention worldwide consumers: aspartame/phenylalene and other aritificial sweetener ingredients are fighting back legally and from advocates worldwide who are trying to have the lifted ban on aspartame reinstated forever so as not to continue to put human lives in harms way or jeopardy.

You must really think the people are too stupid to help themselves against these perceived grand standing tactics regarding the remarks about your new attempts to use natural sugars instead of aritificial ones. You should have never used it in the first place. You had to know that when the ban was lifted by Donald Rumsfeld during the first day of the Reagen Admin. that this was a bomb that would go off eventually and decimate many lives before changes can or if ever, will take place. It was banned in this country for a very good reason. But profits versus human rights/disability rights does not stand a chance against the greed need machine of the soft drink industry.

Boo on you.

A concerend citizen, Ginger Ferrer
and community advocate.

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Posted by Ginger Ferrer
16 February 2013 | 18h542013-02-16T18:54:36Z

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