Tag: Pepsi

The World Health Organization reaffirmed its recommended intake of aspartame Thursday, but the agency’s classification of the sweetener as a possible carcinogen could still scare away diet soda drinkers and lead to new beverage formulas.

Soda consumption has fallen over the past two decades as consumers have switched to drinking more water or picking beverages with less sugar. However, diet sodas have been a bright spot for the category in recent years.

Although full-calorie options still dominate the soda segment, diet sodas now represent more than a quarter of sales. Coca Cola’s and Pepsi Co’s bets on zero-sugar versions of their namesake sodas have been paying off for both companies. Diet Coke, Coke Zero, Pepsi Zero Sugar and Diet Mountain Dew all contain aspartame.

On Thursday, the International Agency for Research on Cancer, a WHO agency, identified a possible link between aspartame and a type of liver cancer called hepatocellular carcinoma. WHO officials said more research on the potential connection is needed.

A separate body, the Joint Expert Committee on Food Additives, said in its own report that the acceptable daily intake of the sweetener is under 40 milligrams per kilogram of body weight, reaffirming prior recommendations. For most adults, that means drinking less than nine to 14 cans of diet soda every day.

While the findings on possible links to cancer may not deter consumers who drink smaller amounts of diet soda, the announcement could at least temporarily hurt sales.

Diet sodas are at least 50% more popular with higher-income consumers than with lower-income people, according to TD Cowen data. Those consumers could be concerned by the WHO’s report, TD Cowen analyst Vivien Azer wrote in a research note last week.

The biggest risk for soda makers is how much attention the announcement garners. CFRA analyst Garrett Nelson wrote in a June 29 note that the news could hurt sales volumes of low-calorie sodas if enough consumers see the headlines.

Likewise, Wedbush analyst Gerald Pascarelli told CNBC he thinks the report could hit sales in the category. But the dip might not last long.

“These companies are quick to pivot and to do what’s necessary to maintain momentum for their brands, and we suspect they’ll do the same thing,” he said.

Dr. Francesco Branca, head of the WHO’s nutrition and food safety division, said manufacturers who use aspartame in their food and drinks should consider making their products without the sweetener.

But PepsiCo Chief Financial Officer Hugh Johnston said on Thursday that the company has no plans to change its use of aspartame. He added that the company doesn’t include the sweetener in much of its portfolio.

Aspartame was used in Diet Pepsi until 2015, when the company tweaked the formula. After backlash from customers, PepsiCo brought it back a year later. But the change didn’t last long — the beverage giant got rid of aspartame in Diet Pepsi in 2020. It still uses it in Pepsi Zero Sugar.

Coke faces more risk of losing out on sales over aspartame concerns, according to CFRA’s Nelson. The beverage giant currently uses the sweetener in both its Diet Coke and Coke Zero, but could swap it out for another, such as stevia, in the future.

Even so, Edward Jones analyst Brittany Quatrochi said she isn’t expecting a big hit to diet soda sales.

“Consumers may trade into a different sugar-free offering, but this isn’t the first kind of food or beverage product to be labeled a carcinogen,” she said.

For example, the IARC classified red meat as a probable carcinogen in 2018.

Makers of diet sodas aren’t fretting over lost sales yet. The American Beverage Association, which lobbies on behalf of Coke, PepsiCo, and Dr. Pepper’s took the WHO announcement as further confirmation of the sweetener’s safety.

“With more than 40 years of science and this definitive conclusion from the WHO, consumers can move forward with confidence that aspartame is a safe choice, especially for people looking to reduce sugar and calories in their diets,” ABA interim CEO Kevin Keane said in a statement.

Besides diet sodas, aspartame can also be found in a variety of foods, including breakfast cereals, chewing gum and ice cream. It’s widely used as a sugar substitute because it is 200 times sweeter, meaning it can be used in much lower concentrations.

For years, brands have been perfecting personalization strategies that resonate with consumers and make them feel like individuals. For many B2C brands like PepsiCo, classic personalization has meant plugging simple forms of data like email, names, addresses or recent purchases into outbound channel communications to ensure touchpoints are viewed as timely, relevant and contextual.

Tim Glomb, VP of Content and Data at Cheetah Digital and Chris Muscutt, Head of MarTech at PepsiCo, recently discussed their take on the use of zero- and first-party data and technology to power effective strategies.

Personalization marketing tools rushed on the scene more than 15 years ago to help brands engage with consumers in digital channels like web, social and mobile. These tools help brands test out different colors, icons, images and offers on websites to optimize the consumer journey.

However, they rarely offered any meaningful psychographic intelligence about visitors like their interests, hopes or needs. The cookie apocalypse and browser-based targeting solutions further contribute to the challenge of getting to know the customer, with Google announcing its plans to phase out third-party cookies altogether.

“Brands have to look at all the different signals they’re receiving from consumers, even the more subtle ones, as the third-party cookie crumbles,” Chris says. “They have to prioritize the useful data in their marketing strategies and then focus on developing those data-collection opportunities. With that, brands can start to build impactful strategies, which can improve the customer journey.”

Game-changing technologies revealed

For maximum impact, brands need to invest in and bring together three game-changing marketing technologies, including:

1. Real-time personalization: This allows brands to learn more about consumers to deliver a better experience every time. It’s about understanding what the consumer intends to do in that specific moment and includes monitoring web interactions as well as mobile SMS, web, app, social, point of sale, etc. This personalization strategy ensures real-time data is captured from these touchpoints and brought back to the platform to be appended to the consumer’s profile.
2. Journey orchestration: Journeys should be simple in nature; think triggered events or a multi-pronged approach that unfolds over time based on consumer behaviors and preferences. Personalized customer journeys lead to growth in interactions, increasing the likelihood of purchases and conversions.
3. Intelligent offers: Leveraging the power of machine learning and analytics to score content and determine not only the right offer but the best sequence of offers, time and optimal context and channel is something that can be greatly automated at scale. This can drive efficiency and efficacy.

To remain competitive in today’s signal-saturated world, brands need to deliver relevant, personalized content throughout the customer journey. According to a new e-Consultancy report, in partnership with Cheetah Digital, entitled ‘2022 Digital Consumer Trends Index: Consumer Attitudes and Trends in Personalization, Privacy, Messaging, Advertising and Brand Loyalty’, consumers are rewarding brands that make personalization a priority. In fact, more than half of the respondents shared that they would trade personal and preference data to feel part of a brand’s community.

Furthermore, real-time offers and content can be ten times more effective than traditional outbound marketing campaigns.

With all the “buzz”, Tim says the term personalization is getting thrown around a lot these days, especially with consumers being more aware of privacy than ever before. However, he isn’t convinced that brands are truly grasping the meaning of personalization. And Chris agrees.

“There’s definitely room to improve efforts,” Chris says. “Making things relevant is one thing, but true personalization is another journey altogether. There can be pockets of both, but they’re not the same thing. That’s where the gaps come — is it personalization, contextualized marketing, or journey planning? Many brands still have a long road ahead before they achieve true personalization.”

Solving data dilemmas through personalization

Big organizations like PepsiCo have mountains of data, and it can be hard to find and make sense of it all. While the process improves as technology advances, Chris says, it’s still a struggle to secure insights.

And he’s not alone. According to a CDP Institute member survey, 63% of marketers can’t assemble unified customer data. Even more, Gartner research reveals that 58% of marketers say integrating customer data is a major obstacle in their multi-channel strategy.

That’s a problem. With consumers empowered to engage with a brand whenever and however they want – and oftentimes, unpredictably – it’s critical for brands to understand them to build a personalized connection. Why? Because personalized connections lead to better outcomes like increased engagement, customer loyalty and brand advocacy.

The solution, however, is quite simple. Brands need to have a single, accessible view of the consumer. Customer data resides in systems like analytics, email, mobile, campaign management, point-of-sale and social – areas that weren’t designed to be integrated.

And while there’s certainly a lot of buzz around relationship marketing and personalization, it’s important for brands to cut through the noise, leverage technology and get to the heart of what truly matters – connecting with and delighting consumers.