Coke With Cane Sugar Is Coming. But Corn Syrup Isn't Going Away.
The soda company plans to add a line of cane sugar-sweetened Coke, its chief executive said, after Trump last week said Coca-Cola had agreed to use 'REAL Cane Sugar' in the soda.
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Cane sugar-sweetened Coke will be a new product and isn't replacing standard Coca-Cola, which is sweetened with high-fructose corn syrup, like many other sodas and drinks in the U.S.
'This is really an 'and' strategy and not an 'or' strategy,' CEO James Quincey said in an interview. 'We are going to continue to use a lot of the corn syrup that we do now.'
The U.S. beverage industry for decades has relied heavily on high-fructose corn syrup to sweeten sodas and other drinks. It is relatively cheap and plentiful, with more than 7 million tons produced each year by mills that grind up corn to make sweeteners, starches and other products.
In a Truth Social post last week, Trump said he had been in contact with Coke about using cane sugar. 'This will be a very good move by them—You'll see. It's just better!,' he posted.
Quincey said Coca-Cola has been adding cane sugar to a number of its products in recent years, including lemonades, teas and other beverages. 'Obviously the president has been an enthusiastic and dedicated supporter and lover of the brand. So I think when he heard that, he was excited and we love that,' Quincey said.
Coca-Cola already sells Mexican-made Coca-Cola sweetened with cane sugar in the U.S., and its Kosher for Passover Coke is made with sugar. PepsiCo also sells a 'real sugar' option.
U.S. sugar consumption far outstrips domestically produced cane sugar. About 12.5 million tons of sugar are consumed in the U.S. each year, while about 4 million tons of cane sugar are produced, according to the U.S. Agriculture Department. The rest comes from imports and sugar derived from sugar beets.
Coca-Cola has enough cane sugar to launch the new line, Quincey said. 'Over time if there's more demand, they'll plant more acres,' he said. 'We're confident that supply won't be an issue.'
Quincey outlined the sugar plans after the company on Tuesday gave its full-year earnings a slight boost but reported lower-than-expected revenue for the second quarter. The Atlanta-based beverage maker said it now expects adjusted earnings per share to rise 3% for the full year, instead of 2% to 3% as previously projected.
Shares of Coca-Cola declined 0.6% Tuesday.
For the second quarter, the company posted a profit of $3.81 billion, or 88 cents a share, compared with $2.41 billion, or 56 cents a share, in the same quarter a year earlier. Stripping out one-time items, adjusted earnings were 87 cents a share. Analysts polled by FactSet had been expecting 83 cents a share.
Revenue ticked up 1% to $12.5 billion, below analyst forecasts for $12.57 billion, according to FactSet.
Coca-Cola has said it lost business from Hispanic consumers in the first half of the year, after false social-media videos purported to show the company turned over employees over to immigration authorities. Hispanic consumers are a core buyer of Coca-Cola and the pullback dented its sales in the first quarter.
Quincey said on the call with analysts that by the end of June, Coke had seen its market share and household penetration return to January levels, before the social-media controversy. 'The issue is now largely resolved. We're back to where we were,' he said.
Coca-Cola executives said that while U.S. consumers have generally been resilient, lower-income shoppers remain under pressure. The company aims to reach those consumers with marketing and occasion-driven beverages, Quincey said.
Write to Laura Cooper at laura.cooper@wsj.com and Dean Seal at dean.seal@wsj.com
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