Big change coming to Pepsi, Coke
AUSTRALIA'S leading beverage companies including Coca-Cola and Pepsi have pledged to reduce the amount of sugary soft drinks they sell by 20 per cent by 2025.
The pledge echoes a similar pledge made by beverage companies in the US in 2014 to cut the number of beverage calories consumed per person by 20 per cent by 2025.
Like that pledge, Monday's announcement by the Australian Beverages Council does not mean manufacturers will reduce the amount of sugar in specific drinks, but rather that they will increase the share of low- and no-sugar options sold.
"It's measured by sales volume," PepsiCo Australia and New Zealand chief executive Danny Celoni said.
"If required, reformulation is on the agenda, but I think for now standard Pepsi serves a role and consumers have a choice. Sixty per cent of our portfolio is already low- and no-sugar. In fact, Pepsi Max is already the number one no-sugar product in the marketplace."
Mr Celoni said the company would take a "combination approach" by rolling out new product lines and flavours across Pepsi and Gatorade, increasing marketing spend for low- and no-sugar options, as well as giving consumers more choice through different pack sizes such as smaller, slimline cans.
"It's really about bringing innovation to the agenda," he said.
Asked whether Pepsi risked fragmenting its own customer base with a confusing suite of products, as with the failed Coke Life and struggling Coke No Sugar, Mr Celoni said he was "confident in the momentum that Pepsi Max has built".
"It has really strong loyalty with consumers," he said. "What we are focused on is giving consumers more choice, more Pepsi Max products in new flavours, new packaging."
Mr Celoni said the decision came from listening to customers. "What's on trend is low- and no-sugar products, and it's quite a big moment for us because there are some major players coming together which hasn't happened [before]," he said.
Obesity is a "complex issue much broader than just beverages", he said, but "we think we have a big role to play".
"The way we boil it down is it's time to listen. It's part of our strategy anyway - we've got a product, planet and people agenda. This fits into our product but also planet agenda."
Australian Beverages Council is the peak body representing the non-alcoholic beverages industry, with members including Coca-Cola South Pacific, Coca-Cola Amatil, PepsiCo, Asahi Beverages and Frucor Suntory.
The pledge applies to carbonated soft drinks, energy drinks, sports and electrolyte drinks, frozen drinks, bottled and packaged waters, juice and fruit drinks, cordials, iced teas, ready-to-drink coffees, flavoured milk products and flavoured plant milks.
"This commitment is the first example in Australia where an industry as a whole has self-regulated its use of sugar in this manner," Australian Beverages Council CEO Geoff Parker said in a statement.
A review of the pledge will be evaluated by an independent auditor in two components - a 10 per cent reduction by 2020 and a total of 20 per cent by 2025.
The auditing process and commitments are based on annual sales weighted volume data as of January 1, 2016. The auditor will certify individual company portfolios confidentially to assess progress and contribution to the industry's pledge.
"All stakeholders, including the government, expect us to critically evaluate this initiative," Mr Parker said. "We intend to ensure a rigorous and continuous independent review process through to 2025 to ensure all signatories contribute to the industry's commitment to reduce sugar."
Health Minister Greg Hunt welcomed the announcement. "The Turnbull Government supports considered and appropriate action to tackle obesity, and encourages all Australians to live healthier lives," Mr Hunt said in a statement.
"It is particularly important that the industry has worked constructively with a number of farming and agricultural groups, particularly those in the sugarcane growing industry ahead of this announcement."