Last Week PepsiCo announced it will significantly reduce the amount of sugar, sodium and fat in many of its products worldwide by 2025. The beverage and snack food giant says the change is in response to consumer’s growing demand for healthier and more nutritious foods, as well as new dietary guidelines from the World Health Organization.
In the plan revealed last Monday, PepsiCo said that by the year 2025, at least two-thirds of the drinks in its global beverage portfolio will contain 100 calories or fewer from added sugar per 12-ounce serving. Currently, a 12-ounce can of Pepsi has 150 calories—all of which come from sugar. Furthermore, and than 40% of PepsiCo’s current drink offering have 100 calories or fewer.
Along with its commitment to cut calories from its sugary drinks over the next decade, Pepsi also said it will reduce levels of saturated fat and sodium in the majority of its products. The global food giant said that at least 75% of its food products will have no more than 1.1 grams of saturated fat, per 100 calories, and no more than 1.3 milligrams of sodium per calorie by 2025.
PepsiCo—which also owns brands including Gatorade and Tropicana—said the new pledge is part of its new sustainability initiative to significantly reduce the calorie count of the company’s beverages as it looks to counter health concerns about sugar-sweetened beverages, and respond to changing consumer preferences.
“To succeed in today’s volatile and changing world, corporations must do three things exceedingly well,’’ PepsiCo Chairman and CEO Indra Nooyi said in a statement. “Focus on delivering strong financial performance, do it in a way that is sustainable over time and be responsive to the needs of society. … Our new goals are designed to build on our progress and broaden our efforts.’’
While PepsiCo’s ambitious recent announcement may seem like a drastic move for a soda company, it’s part of a wider trend in the beverage industry, driven in large part by a need to turn around sales as soda consumption declines.
In 2015, the total volume of soda consumed in the U.S. dropped 1.2%, compared to a drop of 0.9% in 2014, according to Beverage Digest’s annual report. The amount of Pepsi consumed by Americans dropped by 3.2%, while consumption of rival Coca-Cola declined by 1%.
A big reason for the decline of soda is a growing body of scientific evidence highlighting the harmful impacts of excess sugar consumption. Although Americans consume 30% more sugar daily now than three decades ago, according to the Obesity Society, nutritional trends are increasingly focusing on the dangers of eating too much sugar.
Consumer groups, local governments, and bodies like the World Health Organization, have recently advocated for diets lower in sodium and sugar to combat obesity and prevent chronic conditions like hypertension. There has also been increasing concern about the use of artificial sweeteners and other additive chemicals, which scientific studies have linked to obesity and diabetes.
As a result, both PepsiCo and Coca-Cola are working to adapt to changing consumer tastes and diversify their offerings by rolling out new drinks and revising older versions to grow sales and keep their core businesses thriving—nearly half of PepsiCo’s $63 billion in revenue came from beverage sales in 2015.
For instance, last year PepsiCo decided to stop using the artificial sweetener aspartame amid questions about the additives impact on health. But in June, the company reintroduced aspartame to some products, saying consumers wanted more choices.
PepsiCo’s 2025 goals are part of a multifaceted initiative aimed at increasing the company’s contribution to sustainability. Along with its plan to make its products healthier by cutting back sodium, fat, and sugar, PepsiCo is also promising to continue shrinking its environmental footprint by reducing its greenhouse gases and improving its water efficiency.