PepsiCo to Drop Aspartame from Diet Pepsi in Effort to Revive Sales

PepsiCo announced Friday that it would replace aspartame from its diet soda line with a sweetener that is reportedly less harmful than the current one. The company hopes that the new move would give Diet Pepsi a big boost in sales by addressing clients’ concerns over health issues.

According to the company, Diet Pepsi will switch form aspartame to sucralose, which is also an artificial sweetener but less harmful. PepsiCo disclosed that it chose to reformulate its soda recipe due to extensive consumer surveys which revealed that Americans weren’t buying diet sodas due to aspartame content.

In 2014, Diet Pepsi sales slipped 5.2 percent, while the market-leading Diet Cola’s sale volume fell 6.6 percent.

Nevertheless, PepsiCo hopes that the new formula would grant it a big boost against its main competitor, the Coca-Cola Company. In its recent announcement, PepsiCo underscored several times that the new product was “aspartame-free.”

“Diet cola drinkers in the U.S. told us they wanted aspartame-free Diet Pepsi and we’re delivering,”

said Seth Kaufman from the PepsiCo North America Beverages.

On the other hand, customers’ response to the change is unclear. The industry is concerned that the new formula may change Diet Pepsi’s taste, which may decrease sales even more. Other industry officials expressed their concerns that people may have permanently switched to natural foods and beverages and they may never return to diet colas.

Sucralose, also known as Splenda, will replace aspartame, also known as Nutrasweet or Equal starting in August. The company hopes that sucralose will be well received by diet cola consumers because it is less controversial than its predecessor.

According to PepsiCo, the new sweetener, which will also contain acesulfame potassium, will be introduced in all types of diet Pepsi, including Caffeine Free and Wild Cherry Diet Pepsi. The beverage giant also disclosed that the new sweetener was the result of a lot of research and was extensively tested on U.S. diet cola consumers.

The industry hoped that diet colas would boost its sales among people concerned with their weight. But as more and more researchers reported that aspartame cancelled any health benefit of the product by boosting cancer risk, many customers switched to bottled water. As a result, U.S. diet cola sales dropped 5.9 percent in 2014. But surprisingly, full-calorie soda sales rose 0.9 percent.

Last year, PepsiCo’s diet soda had a market share of only 4.3 percent, while Diet Coke had more than 8.5 percent.

Analysts are currently eager to learn whether Coke would make a similar move to Pepsi’s. Coca-Cola seemed surprised by its rival’s announcement. Coca-Cola’s CEO Muhtar Kent was delivering an interview to CNBC when the announcement was made and he seemed clueless about the change. He also declined to say whether his company would remove aspartame from its diet soda.

Mr. Kent, however, told CNBC that, although he was not planning to defend aspartame, the European Food Safety Authority released a recent report which revealed that the artificial sweetener was “safe.”

Later that day, the company issued a public statement and let everyone know that it had no intention of changing Diet Coke’s formula.