Sugar-sweetened soft drinks coming back to mainstream

McClatchy Newspapers (MCT) - Bowing to consumer trends, two soft drinks with connections to the past were launched this week for a national, but brief, eight-week run.

Pepsi Throwback and Mountain Dew Throwback are sweetened with sugar made from cane and beets, unlike their namesakes, which use high-fructose corn syrup. High-fructose corn syrup has been the mainstay for soda pop since the 1970s.

The intent, said Pepsi spokeswoman Nicole Bradley, is to remind Baby Boomers what the two drinks tasted like back in the 1960s and 70s. "And for Millennials, they're something new," Bradley said, generally referring to those born in the 1980s and 1990s.

The sugar-sweetened products come as more consumers are returning to sugar and forsaking corn syrup, which is criticized as a contributor to obesity. The price of corn syrup has also risen with the advent of corn-derived ethanol for fuel, undercutting the cost advantage it long held over cane or beet sugar.

But nostalgia, more than cost or health concerns, is driving at least some of the new popularity, industry sources say. For example, Snapple, the line of non-carbonated drinks owned by Dallas-based Dr Pepper Snapple Group, announced in March that sugar is replacing corn syrup in its drinks. Snapple, launched in 1972 by the Unadulterated Food Co., initially supplied health-food stores.

Coca-Cola from Mexico, which is made using cane sugar, finds a fan base in consumers who are willing to pay 50 percent more than American Coke.

And then there's sugar-sweetened Dr Pepper from the small town of Dublin, Texas. It also commands a hefty premium _ but Dublin is no longer the only source of such Dr Pepper.

Recognizing the demand, several other Dr Pepper bottlers now have special production runs of the sugar-made variety. And Dr Pepper Snapple Group itself has taken advantage of the trend by having its wholly owned North Texas distribution unit secure sugar-sweetened supplies from the Dr Pepper bottler in Temple.

Both Pepsi and Coca-Cola produce their signature products with sugar to be kosher for Passover, although they sell them only for a short period every year.

Since 2005, however, Coke began directly importing some Mexican-made cola from one of its bottlers to satisfy a small but loyal market niche, said David Swords, an Austin-based spokesman for the company. "It's a reminder of home for many Mexicans here," he said.

Coke does not produce a sugar-sweetened version in the United States, except for Passover.

"The reason is that our research indicates that there is no discernible difference in taste," said Ray Crockett, a company spokesman in Atlanta. "A Coke is a Coke."

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Although Pepsi Throwback will leave the market by the end of June, the company also has begun test-marketing a sugar-sweetened product called Pepsi Premium in about 10 cities, Bradley said.

While high-fructose corn syrup has become the target of some food activists, studies that report greater obesity and other health problems in people who drink corn-syrup-sweetened soft drinks often did not make comparisons with people who drink their sugar-sweetened counterparts.

In addition, says the Corn Refiners Association, some tests used abnormally high amounts of fructose not found in the human body instead of testing corn syrup. "This has created confusion," said Audrae Erickson, the industry group's president.

Last year, the American Medical Association concluded that "high-fructose syrup does not appear to contribute to obesity more than other caloric sweeteners." Such syrup is a blend of nearly equal amounts of fructose and glucose.

The watchdog group Consumers Group says both corn syrup and sugar deliver empty calories.

While high-fructose corn syrup has been implicated in a rise in type 2 diabetes, obesity and other health problems, there's no clear evidence that it increases their risk more than regular sugar does," the group said. Few sweeteners provide nutrients, it said, with the exception of old-fashioned blackstrap molasses, which contains some calcium and iron.

The switch to sugar coincides with huge swings in the price of corn coinciding with demand for corn-derived ethanol.

Most of the world sweetens its soda pop with sugar. The exception is the United States, at least in part because of government programs that keep American-produced sugar higher than the world price and other programs that keep corn prices low _ at least, before the ethanol boom struck.

"The common thinking was that wherever producers could get away with substituting HFCS for sugar, they would," said Jack Roney, director of economic and policy analysis with the Sugar Alliance, a Washington-based industry group.

In the early 2000s, the spot market price of dry-weight corn syrup was 15 to 19 cents per pound, compared with 25 cents for sugar, according to U.S. Department of Agriculture figures. But the gap has narrowed. Sugar now runs 31 to 35 cents, while the corn-derived sweetener fetches roughly the same, 33 cents.

However, Roney notes that big buyers like Pepsi and Coca-Cola likely do not rely on the spot market, instead signing long-term contracts from big suppliers. He speculated that such deals might allow them to buy corn syrup for as low as 25 cents a pound.

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Roney said that whatever the pricing difference or similarity, the actual cost of ingredients in a soft drink is probably far less than the 15 percent found in many grocery items.

"It's not an issue of pricing," agrees John Sicher, editor and publisher of Beverage Digest . "It's a way to appeal to consumers who might like something different, something more traditional."

Erickson, of the corn refiners group, acknowledges flat or slightly declining use of corn syrup in soft drinks. He blames not sugar-sweetened rivals, but the popularity of bottled water and diet drinks.

USDA statistics show a slight decline of total corn-syrup deliveries since 2000. But the use of sugar in soft drinks has surged from 39,532 tons in 1998 to 123,365 tons in 2008, the department said.

That might be a generational thing.

Robb Walsh, a Texas author and food writer, did a blind taste test of the two versions of Dr Pepper. His non scientific study involving Houston Press colleagues found that preferences depended on what the individual drank growing up.

"I would taste Dublin Dr Pepper and just have these waves of nostalgia and think the flavor was resplendent," said Walsh, a Baby Boomer . "The young people who didn't grow up on it found it tasted weird."

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© 2009, Fort Worth Star-Telegram.