Not Such a Sweet Deal
May 1, 2007
Not Such a Sweet Deal
The beverage industry, which has widely used high fructose corn syrup as a sweetener since the early 1980s, might be considering other options these days — and not for the reasons you might expect.
For several years, the nutrition community has engaged in a debate over sugar vs. high fructose corn syrup. On one side, some nutritionists blame the switch to high fructose corn syrup in soft drinks, as well as other beverages and foods, for the obesity epidemic. They argue that the body processes HFCS differently than other sweeteners, affecting metabolism. Proponents of the ingredient say its blend of fructose and glucose replicates that of table sugar, and that the body deals with them both the same way.
But the nutrition debate pales in comparison to today’s environmental debate, and like so many conflicts, the sugar vs. high fructose corn syrup battle might be decided by market pressures rather than nutrition arguments. Rising corn prices resulting from demand for ethanol fuel are putting the squeeze on companies that rely on high fructose corn syrup to sweeten their products. Corn prices rose to a 10-year high in February based on demand for ethanol production.
“The price increases that we’re seeing for corn and high fructose corn syrup are unlike we’ve seen in many a year. We’re clearly feeling the pinch and it’s been tough,” said a Coca-Cola foodservice executive at the Reuters Food Summit in Chicago, according to the news agency.
John Brock, chief executive officer at Coca-Cola Enterprises, was quoted in a recent International Herald Tribune report on the issue, saying, “We, as an industry, are facing unprecedented issues on cost.”
The pricing situation for both corn sweeteners and sugar is complicated, and has brought about its own ugly debate over the mix of supply, demand, government subsidies and import quotas that govern the corn and sugar markets.
Beverages are not the only products affected by the rising costs — food prices overall are expected to increase, leading some to predict that the food vs. fuel battle will only grow as we try to balance the need for alternative fuel options with affordable food.
The beverage industry will, of course, need to figure out how to deal with the cost increases in the short term. From an even broader perspective, it also will be interesting to see which sweetener companies choose if prices eventually reach equal levels.
Cover Story — Nestlé USA
Special Report — Top 100 Beverage Companies
Category Focus — Sports drinks
Global Report — Mexico and Central America
Packaging — Secondary packaging
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Bonus — Beverage Product Guide