23 May 2007 - A recent article published by the 'Associated Press' examines why US soft drink producers are sticking to high fructose corn syrup (HFCS) despite the fact that are paying more for the sweetener.
The report goes on to show that there is one simple reason - for now, HFCS is cheaper than sugar.
Sugar prices skyrocketed in the 1980s which prompted manufacturers to switch to HFCS. This year, HFCS prices have increased mainly due to the rising demand of corn for ethanol production. Meanwhile, sugar prices have increased despite having eased from the peaks reached due to Hurricane Katrina in 2005.
The ‘AP’ reports that HFCS 55, made of 55% fructose and 45% glucose (or corn syrup), was quoted at 18.9 cents a pound on Friday 18th May 2007 in the Midwest and was over 20 cents a pound in the Northeast. Midwest beet sugar in comparison sold at 25 cents a pound that same day, while refined cane sugar in the Northeast was 27.45 cents.
So far, only one company has made the shift to sugar. In November 2006, Jones Soda Co. announced that the company would be transitioning to use pure cane sugar instead of HFCS in its products.
Jones Soda decided to return to sugar after conducting a survey that showed that its customers wanted sugar-based products, Peter van Stolk, the company's CEO, told the ‘AP’. Expensive HFCS was another reason for its decision.
The decision and costs related to the decision had their impact on earnings - Jones Soda needed to reformulate its recipes and change equipment in 13 plants. Nonetheless, the soda maker continues to provide stores with its cane sugar-based drinks.
Major beverage firms such as Pepsi and Coca-Cola seem to have no intention on changing sweeteners for the moment.
A Coca-Cola spokesperson told the ‘AP’ that the company has no plans to change any of its beverages now. Pepsi declined to comment on the matter.
However, in March, FLEXNEWS published an article stating that a Coca-Cola executive said his company was "feeling the pinch from high corn prices, which have raised the costs of high fructose corn syrup, its main sweetener in the U.S. market, and Coke may investigate alternatives as a result".
Finally, Craig Ruffolo, vice president of Californian sweetener ingredient marketer McKeany-Flavell told the ‘AP’ that maybe other food and drink companies may follow Jones Soda. He believes that “other companies are in R&D and might cross over if the difference in prices makes it economically viable”.