NEW YORK -- The continuing decrease in the sale of diet carbonated soft drinks has been tied to concern about the safety of aspartame. A recent study showing the sugar substitute is safe, however, is not expected to turn things around anytime soon.
The European Food Safety Authority issued a report this past week declaring that the consumption of aspartame is safe. The U.S. Food and Drug Administration made a similar declaration years ago. Still, “there has been a resurgence of negative sentiment and questions around the health and safety of aspartame,” according to a recent research note from Bonnie Herzog of Wells Fargo Securities.
“While we don’t believe the [European] report will change short-term negative trends, it could lead to a bottoming out of negative sentiment and a gradual return to volume growth in diet CSDs,” she noted.
However, Herzog, citing a recent survey of beverage retailers, believes sugar substitutes are just one of three major trends that have led to a slacking interest in diet sodas:
- Health & Wellness: “The majority of our retailer contacts believe consumers are shifting to healthier and all-natural options like bottled waters and teas that don’t have artificial sweeteners.”
- Regular CSDs: “Because of the health concerns with artificial sweeteners, some of our retailers believe consumers are switching to regular offerings, which are not perceived to be any less healthy, but consuming at a lower rate as they rationalize calorie intake.”
- Energy: “Our retailers believe that many consumers, particularly millennials, are switching to the energy category. We believe certain ‘CSD-like’ energy offerings like Monster Zero Ultra, have sourced much of their growth from diet consumers.”
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