Why SUGAR Prices mean Little to Beverage Profits
TFirst in a comment to a recent Blog Post of mine wrote me a question asking,
"What will happen with DPS as Sugar Prices continue to rise?"
Well.... DPS and Coca-Cola and Pepsi are all ahead of the game. They all are slowly jumping on board 2 trends:
Trend 1) "STEVIA" This is an Herb that was recently discovered in Africa. It may be difficult to re-produce beverages using Stevia and still retain the same taste as the Sugar equivalent beverage.
However, Dr. Pepper Snapple Group already announced earlier this year their intent to produce and market a beverage using STEVIA as their Sugar replacement. This beverage is called "ALL SPORT." It may very well become the first drink to use Stevia. Perhaps it will be sold in stores near you in 2010 / 2011.
Trend 2) Health conscious consumers means increased demand for Healthier beverages.
Pepsi + Coke + DPS have all been pushing healthy versions of their drinks.
The biggest thing going with DPS is their Snapple Makeover. They took out almost all of their SUGAR content right out of their Juice.
These drinks and others all have 3 or less grams of Sugar per bottle. That is a huge drop from the nearly 30 grams of Sugar in the original juice drinks.
So, if the All Natural lineup of Snapple starts to get noticed for its Health Conscious and almost Sugar-less approach for Consumers, then we may see the Sugar Packed Snapple get phased out.
Dr. Pepper Snapple Group is already setting themselves up well by decreasing the content of Sugar in their Drinks.
Coca Cola's COKE ZERO also removes the Sugar.
Beverage company's have seen the writing on the wall regarding commodities and have taken steps years ago to address inflationary impact to their commodities costs.}
So, do not let anyone make you *scared* of Sugar Prices.... We are still a Far Cry away from 1970s era Peak Sugar prices.