Coca-Cola to launch product with U.S. cane sugar

Coca-Cola has confirmed it will expand its offerings with a new Coke product made with U.S. cane sugar.

The announcement comes days after President Donald Trump said on social media the Atlanta beverage giant would change a key soda ingredient. It wasn’t immediately clear the scope of the change.

Coca-Cola has used high fructose corn syrup in some of its U.S.-made sodas since the 1980s and will continue to in its namesake soda. Last week, the company teased “new innovative offerings.”

Tuesday morning, Coca-Cola said it will launch the new product with cane sugar this fall “as part of its ongoing innovation agenda.”

The company said the addition would “offer more choices across occasions and preferences.”

Coca-Cola Chairman and CEO James Quincey said during a teleconference with analysts: “I think that will be an enduring option for consumers.”

That could suggest Coca-Cola is looking at “something they feel like is going to be part of the portfolio for the foreseeable future,” said Duane Stanford, editor and publisher of trade publication Beverage Digest.

Rival Pepsi already has a “real sugar” version.

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Coca-Cola uses cane sugar in other countries such as Mexico, and “Mexican Coke” is already available for sale in tall glass bottles in many stores in the U.S.

“It could be basically Mexican Coke that’s not imported,” Stanford said of Coca-Cola’s new product plans. “They’ve done really well with it, and there are consumers it resonates with.”

Coca-Cola uses cane sugar in some of its other U.S. products such as lemonade, tea and Vitaminwater drinks, Quincey said Tuesday.

But Quincey told The Wall Street Journal the company will “continue to use a lot of the corn syrup that we do now.”

Coca-Cola previously said it was working to reduce sugar in its beverages. One of its fastest-growing brands is Coca-Cola Zero Sugar, with 14% volume growth during the quarter.

“We are definitely looking to use … the whole tool kit of available sweetening options, to some extent, where there are consumer preferences,” Quincey said on the earnings call.

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Coca-Cola’s product announcement comes as the Trump administration’s “Make America Healthy Again” initiative has pressed companies to remove ingredients such as artificial dyes. U.S. Health and Human Services Secretary Robert F. Kennedy Jr. has been a critic of high-fructose corn syrup.

It’s hard to know if the president played a role in Coca-Cola’s announcement, Stanford said. “We appreciate the President’s enthusiasm for our Coca-Cola brand,” Quincey said Tuesday.

Over the weekend, some people visiting popular downtown attraction World of Coca-Cola said they liked the idea of switching to cane sugar because of perceived health advantages. Many said they preferred Mexican Coke.

“It tastes better,” said Kristin Carder of Dallas, Georgia. “And honestly, I don’t feel as bad after I drink it.”

The Food and Drug Administration says it’s not aware of any evidence that products with high-fructose corn syrup are less safe than those with sugar.

But when it comes to consumers, “perception is reality, and if a consumer votes with their wallet against an ingredient, you have to pay attention to that,” Stanford said.

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On Tuesday, Coca-Cola said net sales hit $12.5 billion this quarter, up 1% from the same period last year. Net income was $3.8 billion, up 58% year over year.

Its global unit case volume dipped 1%, “due to a weaker than expected June,” said John Murphy, chief financial officer for Coca-Cola.

The company still expects to deliver revenue growth of 5% to 6% by year-end, and it continues to view global trade war dynamics as “manageable,” as it said in its first-quarter results.

“This year has been, I think, characterized by rapid turns of events … which has required us to respond with greater agility and speed,” Quincey said on the earnings call.