Pepsi Drops Controversial Sweetener From Diet Sodas

Diet Pepsi in new skinny cans is seen in a supermarket in New York
Richard Levine/Alamy

By Brian Sozzi

Beverage and snack giant PepsiCo on Friday announced a bold step to try to revive sluggish diet cola sales by replacing the controversial sweetener aspartame in its drinks.

Beginning in August, Diet Pepsi, Caffeine-Free Diet Pepsi and Wild Cherry Diet Pepsi in the U.S. will be sweetened with a blend of sucralose and acesulfame potassium. Aspartame has been linked to cancer in lab mice, among other potential health risks.

"Diet cola drinkers in the U.S. told us they wanted aspartame-free Diet Pepsi, and we're delivering," Seth Kaufman, senior vice president of the Pepsi and Flavors Portfolio, said in a statement.

In an interview, Kaufman described how Pepsi would market the change to customers. "We are going to prominently display it on the package that Diet Pepsi is aspartame free," he said. "And as we get closer in August to the launch we'll obviously have more of the holistic marketing plans fleshed out."

Coke Sticks by Aspartame

Like its rivalCoca-Cola, Pepsi has seen its beverage business weighed down by tepid sales of diet colas due in part to consumers' health concerns about aspartame. Coke could not immediately be reached for comment on whether it is planning any similar moves to replace aspartame in its products. In an interview on CNBC on Friday, Coke CEO Muhtar Kent reiterated that he felt aspartame was safe.

"I think the trends in diet are less negative than they've been, but diet is still under pressure -- there is no question about that," Pepsi executive vice president and CFO Hugh Johnston noted in an April 24 interview with TheStreet. According to Beverage Digest, Diet Pepsi sales fell 5 percent last year, whereas Diet Coke dropped 6.6 percent

Replacing aspartame is yet another step by Pepsi to address more health-conscious consumers, who are no longer responding to diet colas. Johnston explained the company is innovating around the still-large diet cola business to support its sales.

"The biggest opportunity here isn't the traditional old diet cola business," said Johnston. "It's tweeners, or those products with less calories than a regular [soda], but more calories than a diet." Johnston pointed to smaller cans for energy drink Mountain Dew Kickstart as an example.

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