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 The New York-based company will announce on Monday that by 2025 at
least two thirds of its drinks will have 100 calories or fewer from
added sugar per 12 oz serving, up from about 40 percent now.
The move, which it plans to achieve by introducing more zero and
low-calorie drinks and reformulating existing drinks, comes as
PepsiCo and rival Coca-Cola <KO.N> come under increasing pressure
from health experts and governments who blame them for fuelling
epidemics of obesity and diabetes.
PepsiCo says the new global target is more ambitious than its
previous goal of reducing sugar by 25 percent in certain drinks in
certain markets by 2020.
"The science has evolved," Mehmood Khan, PepsiCo's chief scientific
officer of research and development, told Reuters.
He gave an example of new flavor ingredients that require less
sweetening, saying: "It's not just about sweeteners, it's about
understanding the flavor ingredients and having proprietary
knowledge and access to them."
The World Health Organization this month recommended taxes on sugary
drinks, as France and Mexico have done, to curb consumption and
improve health. The soft drinks industry opposes such taxes.
Despite its name, PepsiCo generates only 12 percent of its $63
billion in annual revenue from its famous cola brand. It makes 25
percent from carbonated soft drinks such as Mountain Dew, with the
rest coming from waters and juices including the Tropicana brand,
plus snacks and dips such as hummus and guacamole.
Its 2025 goals also include targets for lowering sodium and
saturated fat.
FINANCIAL PROGRESS
"These are good steps. But when we have an obesity crisis, I think
there is more that we can be doing," said Mindy Lubber, president of
non-profit organization Ceres, which pushes companies and investors
to take action on sustainability.
"If a food and beverage company is not looking at nutrition, they
are not looking at the direction the world is going in."
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Coke has said that by 2020 it would offer low-calorie or no-calorie
options in every market as part of its sustainability goals.
PepsiCo is building on goals set out 10 years ago, which targeted
nutritional, environmental and social improvements. Khan said there
has also been financial progress.
He said the company has saved $600 million over the past five years
from reduced water, packaging and energy use, as well as a reduction
in waste. He added that, over the past decade, average returns on
investments in this area have been better than the cost of capital.
Khan expects similar returns in future, which might be good news for
investors, who generally don't base investment decisions on
sustainability.
"It might not be the driving factor, but it might a filter," said
Morningstar analyst Philip Gorham.
Other targets include a 15 percent improvement in the water
efficiency of PepsiCo's direct agricultural supply chain in
water-stressed areas by 2025 and a 20 percent drop in greenhouse gas
emissions across its supply chain by 2030.
(Reporting by Martinne Geller in London; Editing by David Goodman)
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