PepsiCo Sets Target for Calorie Reduction in Beverages by 2025

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PepsiCo says it intends cutting down significantly on the calorie count of its beverages by 2025 as part of its new initiative to combat a variety of issues, ranging from health concerns to water efficiency.

The leading beverage company said on Monday that at least two-thirds of its soft drinks will contain 100 calories or fewer per 12-ounce serving by 2025. That will mark a significant improvement on the current proportion of about 40 percent of such beverages in its range.

“Over the last decade, we have made progress in reducing sugar,” PepsiCo Chairman and Chief Executive Indra Nooyi told CNBC. “But there’s a lot more we needed to do because countries which loved sugar were growing faster than countries which were consuming lower-sugar products.”

The global beverage leader will work to achieve the set target by introducing more zero- and low-calorie products. It will also look to reformulate some of its existing drinks to reduce sugar content.

The move represents a significant commitment by PepsiCo which, alongside rival Coca-Cola, has come under intense pressure from governments and health professionals for the sugary drinks they produce. These beverages have been identified as a major contributor to the rising obesity epidemic and incidence of diabetes. Health advocates have also called for tax on sugar-based drinks to discourage their consumption.

This month, the World Health Organization suggested taxes on sugary drinks as a means of improving health. Such taxes, which are already in existence in France and Mexico, have expectedly been contested by soft drinks makers.

PepsiCo, which makes more than $1 billion annually from the sale of its sugary flagship drink Pepsi, says its new global target for calorie reduction is more ambitious than the earlier target of cutting sugar in some drinks by 25 percent in select markets by 2020. This it attributes to advancement in the science and discovery of new flavors requiring less sweetening.

The beverage company has been pushing its low-calorie products, including a new Diet Pepsi with aspartame. It announced Pepsi Zero Sugar to replace Pepsi Max in the summer.

Although mostly known for its Pepsi drink, PepsiCo makes just about 12 percent of its revenue from the famous cola brand. Carbonated soft drinks account for 25 percent of its $63 billion annual revenue.

The rest of PepsiCo’s revenue comes from unsweetened drinks, including iced tea and coffee products marketed under the Starbucks and Pure Leaf brands, among other products. The company also produces a variety of flavored water, juices, snacks, and the Gatorade drink brand.

As part of the PepsiCo’s sustainability goals, CEO Nooyi said efforts will be made to increase water savings and reducing greenhouse gas emissions across its global operations in the coming years.

The beverage leader also said there are ongoing efforts to cut down on the amount of sodium in its products. It has a target of reducing sodium in three-quarters of its food products across the globe to no more than 1.3 milligrams per calorie by 2025.

PepsiCo, which says it now prepares its snacks with “heart-healthy oil” in many countries, also disclosed that saturated fat in at least three quarters of its foods portfolio will not be higher than 1.1 grams per 100 calories by 2025.

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